Bank of America/Merrill Lynch Insurance Conference Joseph P. Lacher President, Allstate Protection The Allstate Corporation

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1 Bank of America/Merrill Lynch Insurance Conference Joseph P. Lacher President, Allstate Protection The Allstate Corporation

2 Safe Harbor This presentation contains forward-looking statements and information. Additional information on factors that could cause results to differ materially from those projected in this presentation is available in the 2009 Form 10-K, Form 10-Q Q for the third quarter 2010, and in our most recent earnings release, available on our website, allstate.com. This presentation also contains some non- GAAP measures. You can find the reconciliation of those measures to GAAP measures on the Investor Relations portion of our website, e, allstate.com, under the Quarterly Investor Info link. 2

3 What We ll Cover 2010 results Allstate Protection overview 2011 priorities 3

4 2010 Results Book value per share improved 14.5% to $35.32 Shareholders equity grew to $19 billion Repurchased shares totaling $160 million Underlying combined ratio within full year outlook Growth initiatives accelerated new business throughout the year Renewal rates declined due to profitability actions in several large l states Homeowners average premium increased 7% Allstate Financial results improved Focus to Win cost restructuring completed Winding down Allstate Bank Operating earnings of $476 million Growth of Allstate Benefits Investment portfolio in a strong position Held exposure to corporate credit and undervalued structured securities Reduced exposure to municipal fixed income and commercial real estatee Hedged against rising interest rates Net investment income down 7.7% 4

5 Leading Franchise in Consumer Protection Strong Brand Comprehensive Distribution Broad Products and Services Large Scale Financial Strength 5

6 Allstate s s Corporate Operating Priorities Consumer focus Operational excellence Enterprise risk and return Capital management 6

7 Allstate Protection Businesses Priorities Exclusive Agency Maintain Auto profitability Emerging Businesses Improve Homeowners profitability Allstate Protection Position businesses Encompass for growth (independent agency) Strengthen execution of core value proposition Sharpen distribution Direct effectiveness Raise customer loyalty 7

8 Allstate Protection Priorities Exclusive Agency Maintain Auto profitability Improve Homeowners profitability Position businesses for growth Strengthen execution of core value proposition Sharpen distribution effectiveness Raise customer loyalty 8

9 Auto Frequency & Severity Trends (%) 2.2 Bodily Injury (BI) Frequency Frequency highest in last six years Q1 Q2 Q3 Q4 Severities stable Average (%) 7.0 Property Damage (PD) Frequency (% Yr/Yr) 10 Paid Severity* (2) 5.8 Q1 Q2 Q3 Q Average (6) 9 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 BI *Paid Severity is for Allstate Brand Total Auto. Frequency Charts are for Allstate Brand Standard Auto. PD

10 Standard Auto Profitability Allstate Brand Standard Auto Combined Ratio Trailing 12 month avg Combined ratio (trailing 12 month avg) ) has flattened Frequency headwind NY and FL injury frequencies pressuring 2010 and 2011 Committed to maintaining Auto profitability 10

11 Improving Profitability and Managing Exposure in Homeowners % Homeowners Rate Changes Increasing rates to improve profitability (000) 2 (2) 8,000 7, Countrywide States with Rate Activity Homeowners Items in Force Reducing exposures in high loss areas Expanding use of underwriting and coverage tools 7,000 6,

12 Catastrophe Losses at Historic Levels? Total Catastrophe Losses Recent catastrophe losses within historic range Effect on Loss Ratio Historic Average (+ - 1 std dev) Excluding Hurricanes & Earthquakes SE Wind/Hail CATs x hurricanes & earthquakes well above average; outside historic range 121 Separate CAT Events AZ Hailstorm Pricing and underwriting actions reflect recent trends

13 Allstate Protection Priorities Exclusive Agency Maintain Auto profitability Improve Homeowners profitability Position businesses for growth Strengthen execution of core value proposition Sharpen distribution effectiveness Raise customer loyalty 13

14 Improving Distribution Effectiveness Agency Loyalty Index Score 5 Agency Performance by Agency Loyalty Index Quintile Growth Highest groups have excellent results Growth Retention Cross-sales sales Allstate Financial production Working to move lower groups upward Training Incentives Attrition/Replacement 14

15 Retention Changes Flattening Allstate Brand Standard Auto Retention Active focus on improving retention Cross-sell sell Multi-line line discounts Sharpen distribution Increase focus on value proposition FL and NY profitability actions have potential to impact aggregate number 15

16 Allstate Protection Businesses Exclusive Agency Emerging Businesses $2.4B annual premium Leveraging cross-sell sell opportunities Incubator to deliver customer value in adjacent space Allstate Protection Direct $745M annual premium Grew 19.8% Encompass (independent agency) $1.1B annual premium Production decline moderating Refocus on historical core strength 16

17 Allstate Protection 2011 Priorities Maintain Auto profitability Improve Homeowners profitability Position businesses for growth Strengthen execution of core value proposition Sharpen distribution effectiveness Raise customer loyalty Continue to strengthen non-exclusive agency businesses 17

18 Allstate An Attractive Investment Leading franchise in consumer protection and retirement 3 Price/Book Multiple Competitively differentiated strategy History of solid capital management Valuation has significant upside potential Q Q Q Q std dev Mean -11 std dev 18

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