899051--2/22/2007--ALLSTATE

related topics

{loss, insurance, financial}

{loan, real, estate}

{competitive, industry, competition}

{operation, natural, condition}

{regulation, government, change}

{condition, economic, financial}

{capital, credit, financial}

{regulation, change, law}

{customer, product, revenue}

{debt, indebtedness, cash}

{cost, operation, labor}

{cost, regulation, environmental}

Risks Relating to the Property-Liability business As a property and casualty insurer, we may face significant losses from catastrophes and severe weather events The nature and level of catastrophes in any period cannot be predicted and could be material to catastrophe losses Impacts of catastrophes and our catastrophe management strategy may adversely affect premium growth Unanticipated increases in the severity or frequency of claims may adversely affect our profitability Actual claims incurred may exceed current reserves established for claims Predicting claim expense relating to asbestos and other environmental and discontinued lines is inherently uncertain Regulation limiting rate increases and requiring us to underwrite business and participate in loss sharing arrangements may decrease our profitability The potential benefits of implementing our sophisticated risk segmentation process ("Tiered Pricing") may not be fully realized Allstate Protection may be adversely affected by the cyclical nature of the property and casualty business Risks Relating to the Allstate Financial Segment Changes in underwriting and actual experience could materially affect profitability Changes in reserve estimates may reduce profitability Changes in market interest rates may lead to a significant decrease in the sales and profitability of spread-based products Changes in estimates of profitability on interest-sensitive life, fixed annuities and other investment products may have an adverse effect on results through increased amortization of DAC A loss of key product distribution relationships could materially affect sales Changes in tax laws may decrease sales and profitability of products Risks Relating to the Insurance Industry Our future results are dependent in part on our ability to successfully operate in an insurance industry that is highly competitive We are subject to market risk and declines in credit quality Concentration of our investment portfolios in any particular segment of the economy may have adverse effects We may suffer losses from litigation We are subject to extensive regulation and potential further restrictive regulation may increase our operating costs and limit our growth Reinsurance may be unavailable at current levels and prices, which may limit our ability to write new business Reinsurance subjects us to the credit risk of our reinsurers and may not be adequate to protect us against losses arising from ceded insurance The continued threat of terrorism and ongoing military actions may adversely affect the level of claim losses we incur and the value of our investment portfolio Any decrease in our financial strength ratings may have an adverse effect on our competitive position Changes in accounting standards issued by the Financial Accounting Standards Board ("FASB") or other standard-setting bodies may adversely affect our financial statements The ability of our subsidiaries to pay dividends may affect our liquidity and ability to meet our obligations The occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability to conduct business effectively

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899051--2/22/2007--ALLSTATE_CORP