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Illinois Insurance Company Reports Results

NORTHBROOK, Ill., Oct. 16 The Allstate Corporation today reported net income of $280 million ($0.39 perdiluted share) for the third quarter of 2002 compared to $226 million ($0.32 per diluted share) for the third quarter of 2001. Operating income was $548 million ($0.77 per diluted share) for the third quarter of 2002, compared to $401 million ($0.56 per diluted share) for the third quarter of 2001. Excluding restructuring charges, operating income for the third quarter of 2002 was $574 million ($0.81 per diluted share) compared to $407 million ($0.57 per diluted share) for the same period in 2001. Operating income is defined as net income before the after-tax effects of realized capital gains and losses, gain (loss) on disposition of operations, dividends on preferred securities of subsidiary trust and the cumulative effect of a change in accounting principle.

" These results mark three consecutive quarters of solid performance and good execution on our performance improvement strategies," said Chairman, President and CEO Edward M. Liddy. "We are pleased with our performance so far this year and we remain committed to delivering consistent earnings growth. We now anticipate that operating income per diluted share for 2002 will be in the range of $2.80 to $3.00 (excluding restructuring charges and assuming normal catastrophes) - $.30 higher than the estimate we issued at the beginning of the year and a $.10 increase from our estimate last quarter.

"As in the previous two quarters, rate increases in auto and homeowners lines have significantly contributed to increased written premium growth of nearly 8% this quarter over the prior year level. Likewise, loss frequencies in the auto and homeowners lines have improved over the prior year's quarter. Texas water and mold related losses remained at challenging levels during the quarter, but to a lesser extent than previous quarters this year.

"With rates taken in this quarter, which will be earned over the next 12 to 24 months, the Allstate brand is now priced at levels that approximate our targeted returns in most markets. The Ivantage lines, however, have not yet reached prices that are at our targeted return levels and we will continue to work toward that goal. We will continue our practice of filing for indicated rates for both the Allstate brand and Ivantage.

"Though some six weeks still remain, this year's Atlantic Hurricane season has been relatively mild and catastrophe losses in the quarter were $96 million, compared to last year's third quarter catastrophe losses of $142 million. Actual catastrophe losses in both the 2002 and 2001 third quarters were lower than normal experience.

"We increased our estimate of prior year incurred losses for Discontinued Lines and Coverages, Asbestos and Environmental and other mass tort exposures by $64 million after-tax ($0.09 per diluted share), as a result of revised estimates of previously reported losses and loss emergence from peripheral (non-manufacturing) insureds.

"Allstate Financial continues to perform relatively well during these difficult economic times with $112 million in operating income, which is $22 million or 16.4% below the third quarter last year. The company accelerated the amortization of its deferred acquisition costs (DAC) for certain investment and retirement products, primarily due to the continuing decline in equity markets and recorded a net after-tax charge of $42 million in the third quarter. Operating income for the first nine months of 2002 of $398 million is up a modest $18 million or 4.7% over the same period in the prior year.

"Our strategy of broadening our footprint in financial services with Allstate agencies continues to proceed well. In the first nine months of 2002, we sold more proprietary and non-proprietary financial services products through this channel than we did in all of 2000 and 2001 combined. This growth is primarily driven by significant increases in fixed annuity, bank and non-proprietary mutual fund deposits.

"In the quarter we also announced several senior management and organizational changes that will position us well as we continue our push to be better and bigger in the property and casualty business and broader in financial services. And in these days of investor concern about corporate America, Allstate shareholders, customers and employees should feel confident that we have an outstanding management team, an excellent corporate governance structure and rigorous financial reporting standards that serve us well."

Summary of results for the quarter and nine months ended September 30, 2002:

                          Consolidated Highlights
                               Quarter Ended            Nine Months Ended
                                September 30               September 30
     ($ in millions,
       except per-share
       amounts)             Est.                     Est.
                           2002     2001   Change    2002     2001    Change
                            $        $        %       $        $        %

     Consolidated Revenues 7,239   7,173       0.9  21,992  21,507      2.3
     Operating Income
      Before Restructuring
      Charges After-tax      574     407      41.0   1,551   1,197     29.6
     Operating Income Per
      Share (Diluted)
      Before Restructuring
      Charges After-tax      .81     .57      42.1    2.18    1.65     32.1
     Restructuring Charges
      After-tax               26       6        --      62      14       --
     Operating Income        548     401      36.7   1,489   1,183     25.9
     Operating Income Per
      Share (Diluted)        .77     .56      37.5    2.09    1.63     28.2
     Realized Capital
      (Losses) Gains
      After-tax             (266)   (131)    103.1    (437)   (211)   107.1
     Gain (Loss) on
      Disposition of
      Operations
      After-tax               --     (34)   (100.0)      5     (40)  (112.5)
     Dividends on Preferred
      Securities of
      Subsidiary Trust(s)
      After-tax               (2)    (10)    (80.0)     (7)    (29)   (75.9)
     Cumulative Effect of
      a Change in
      Accounting Principle
      After-tax               --      --        --    (331)     (9)      --
     Net Income              280     226      23.9     719     894    (19.6)
     Net Income per
      share (Diluted)        .39     .32      21.9    1.01    1.23    (17.9)
     Weighted Average
      Shares Outstanding
      (Diluted)            708.1   719.7     (1.6)   711.3   726.2     (2.1)
     Book value per
      share (Diluted)      25.22   24.16       4.4   25.22   24.16      4.4


    -- The increase in third quarter 2002 consolidated revenues was due to
       increased Property-Liability premiums earned, partially offset by
       higher realized capital losses as compared to the same quarter in the
       prior year.

    -- The consolidated operating income increase in the third quarter of 2002
       when compared to the prior year quarter was due to:
                     -- increased Property-Liability premiums earned
                     -- improved auto and homeowners loss frequencies
                     -- lower catastrophe losses

                   These factors were partly offset by:
                     -- reserve strengthening for asbestos and environmental
                     -- decreased Allstate Financial operating income
                     -- increased restructuring expenses

    -- Restructuring expenses incurred during the third quarter of 2002
       totaled $40 million, or $26 million after-tax and $0.04 per diluted
       share.  Restructuring expenses for the first nine months of 2002
       totaled $95 million, or $62 million after-tax and $0.09 per diluted
       share.  These expenses related to the previously announced realignment
       of the company's claim offices, Customer Information Centers and other
       back-office operations and a non-cash charge resulting from pension
       benefit payments made to agents in connection with the re-organization
       of employee agents to a single exclusive agency independent contractor
       program announced in 1999.

    -- During the third quarter of 2002, Allstate purchased 3.6 million shares
       of its stock at an average cost per share of $36.14 for an overall cost
       of $131 million. The total cost of shares repurchased under its current
       $500 million repurchase program through September 30, 2002 is $427
       million. The company intends to complete this repurchase program by
       December 31, 2002.

    -- The components of pre-tax realized capital gains (losses) were:

                                          Est. Quarter Ended
                                          September 30, 2002
     ($ in millions)       Property-     Allstate     Corporate
                           Liability    Financial     and Other       Total

     Valuation of
      derivative instruments   $(8)          $(6)         $--          $(14)
     Sales                    (212)          (51)           1          (262)
     Investment write-downs    (31)         (107)          (5)         (143)
     Realized Capital
      Gains (Losses)         $(251)        $(164)         $(4)        $(419)


                                              Quarter Ended
                                            September 30, 2001
     ($ in millions)       Property-     Allstate       Corporate
                           Liability     Financial      and Other     Total

     Valuation of
      derivative instruments  $(34)         $(52)         $--          $(86)
     Sales                     (83)            9           --           (74)
     Investment write-downs    (17)          (27)          --           (44)
     Realized Capital
      Gains (Losses)         $(134)         $(70)         $--         $(204)


                                          Est. Nine Months Ended
                                            September 30, 2002
     ($ in millions)        Property-    Allstate       Corporate
                            Liability    Financial      and Other     Total
     Valuation of
      derivative instruments  $(32)         $(32)         $--          $(64)
     Sales                    (272)          (91)          --          (363)
     Investment write-downs    (76)         (165)          (7)         (248)
     Realized Capital
      Gains (Losses)         $(380)        $(288)         $(7)        $(675)


                                            Nine Months Ended
                                           September 30, 2001
     ($ in millions)       Property-     Allstate       Corporate
                           Liability     Financial      and Other     Total

     Valuation of
      derivative instruments  $(71)         $(84)         $--         $(155)
     Sales                      28           (19)           1            10
     Investment write-downs    (85)          (96)          --          (181)
     Realized Capital
      Gains (Losses)         $(128)        $(199)          $1         $(326)

    -- The realized loss on sales during the third quarter is primarily
       related to equity sales and an interest rate futures program.

       Allstate had pre-tax realized capital losses totaling $174 million
       during the third quarter and $213 million in the first nine months of
       2002 relating to equity sales during a volatile and declining market.
       Allstate manages its equity portfolio on a total return basis, and
       believes that these results are consistent with the declines in the
       overall equity market.  Likewise, Allstate had pre-tax unrealized gains
       on its equity portfolio of $213 million at September 30, 2002, a
       decline of $335 million since June 30, 2002 and $647 million since
       December 31, 2001.  Allstate's $3.5 billion equity portfolio represents
       3.9% of total invested assets at September 30, 2002.

       The interest rate futures program is used to manage the Property-
       Liability interest rate risk exposure relative to its duration target.
       During the third quarter, a short futures position was in place which
       reduced the Property-Liability portfolio duration by as much as 0.3
       years and produced a pre-tax realized loss of $97 million in the third
       quarter and $163 million for the first nine months of 2002.

       As a component of our overall interest rate risk management, these
       realized futures losses are most appropriately considered in
       conjunction with the pre-tax unrealized gains on the Property-Liability
       fixed income portfolio. These gains totaled $2.01 billion at September
       30, 2002, an increase of $829 million since June 30, 2002 and
       $1.16 billion since December 31, 2001.  Viewed in the aggregate, these
       results best reflect the full impact of the decline in rates on
       portfolio values and the overall balance sheet.  The interest rate
       futures program performed as expected given the decline in interest
       rates and enabled the management of our interest rate exposure.
       Accordingly, as interest rates and the duration of the Property-
       Liability fixed income portfolio have declined, the number of futures
       contracts held by the Company related to this program have also
       declined.

    -- During the third quarter of 2002, U.S. credit market conditions
       deteriorated causing both weakened corporate credit and reduced market
       liquidity.  Allstate had pre-tax realized capital losses related to
       investment write-downs of $143 million in the third quarter and
       $248 million in the first nine months of 2002, or 0.2% and 0.3% of
       total investments at September 30, 2002, respectively.  During the
       third quarter, Allstate had write-downs on approximately 39 issuers,
       with no one write-down greater than $26 million.   Approximately
       two-thirds of the write-downs in the third quarter were related to the
       airline, utility, and oil and gas industries, with the balance spread
       across multiple sectors.

    Property-Liability Business

                          Property-Liability Highlights

                               Quarter Ended           Nine Months Ended
                               September 30               September 30
     ($ in millions,
      except ratios)
                         Est.                       Est.
                         2002     2001    Change    2002      2001    Change
                           $        $        %       $         $        %
     Property-Liability
      Premiums Written   6,305    5,846      7.9   18,063    17,014      6.2
     Property-Liability
      Revenues           6,082    5,895      3.2   18,287    17,759      3.0
     Operating Income
      before
      Restructuring
      Charges              488      295     65.4    1,232       879     40.2
     Restructuring
      Charges After-tax     26        5       --       61        10       --
     Operating Income      462      290     59.3    1,171       869     34.8
     Realized Capital
      (Losses) Gains
      After-tax           (160)     (85)    88.2     (240)      (79)      --
     Gain (Loss) on
      Disposition of
      Operations            --      (34)  (100.0)       5       (40)  (112.5)
     Cumulative Effect
      of a Change in
      Accounting Principle
      After-tax             --       --       --      (48)       (3)      --
     Net Income            302      171     76.6      888       747     18.9
     Catastrophe Losses     96      142    (32.4)     494       761    (35.1)
     Combined Ratio
      before impacts
      of catastrophes
      and restructuring
      charges             95.0    100.4     (5.4)    95.7      97.7     (2.0)

     Impact of
      catastrophes         1.6      2.5     (0.9)     2.8       4.6     (1.8)
     Impact of
      restructuring
      charges              0.7      0.1      0.6      0.5       0.1      0.4

     Combined Ratio       97.3    103.0     (5.7)    99.0     102.4     (3.4)

    -- Factors contributing to Property-Liability premium written growth in
       the third quarter of 2002 as compared to the same quarter in the prior
       year included:
                -- A 7.8% increase in Allstate brand premiums written
                     -- 6.8% increase in standard auto
                     -- 21.2% increase in homeowners
                     -- 10.2% decrease in non-standard auto
                -- A processing slow-down following September 11, 2001
                   impacting written premium in the third quarter of 2001 by
                   an estimated 0.4%


    -- The following net rate changes have been approved for Property-
       Liability:


                                   Quarter Ended         Nine Months Ended
                                September 30, 2002      September 30, 2002

                                             Weighted                Weighted
                               # of States   Average    # of States  Average
                                               Rate                    Rate
                                            Change (%)             Change (%)
     Allstate brand
      Standard Auto                10          4.3          36          7.0
      Non-standard Auto            10         17.6          34         12.3
      Homeowners                    8         13.0          40         19.1

     Ivantage
      Standard Auto (Encompass)    11          6.9          32          6.9
      Non-standard Auto (Deerbrook) 4          9.0          22          9.4
      Homeowners (Encompass)       12          6.7          34         14.3

    -- Factors contributing to the increased Property-Liability loss costs in
       the third quarter of 2002 when compared to the prior year quarter
       include:

         -- The completion of an annual review of reserve estimates for
            asbestos, environmental and other mass tort exposures resulting in
            increased incurred pre-tax losses for asbestos of $72 million as a
            result of revised estimates of previously reported losses and loss
            emergence from peripheral (non-manufacturing) insureds, $23
            million for environmental and $3 million for other mass torts.  A
            similar review in the prior year third quarter resulted in
            increased incurred pre-tax losses of $94 million for asbestos and
            decreased incurred pre-tax losses of $46 million for environmental
            and $38 million for other mass torts.  Estimates for claims
            incurred but not reported (IBNR) represent approximately 57% of
            the total reserves held for asbestos and environmental exposures.

         -- Overall development of prior year claims resulted in favorable
            auto development, offset by continuing upward development of
            homeowners:

              ---Reserve Impact---         ----Loss Ratio Impact---
                       $ in Mil.           Ratio    Pr. Yr. Variance
            Auto           $(83)           (1.4)        (0.4)
            Homeowner       111             1.9         (1.1)

            Pre-tax Total   $28             0.5         (1.5)


            These factors were partially offset by:
            -- improved auto and homeowners frequency
            -- decreased catastrophe losses

            Approximately $35 million of Homeowner upward loss development,
            noted above, was related to mold claims in Texas.

            -- Incurred losses related to mold claims in Texas, have been:

                 ($ in millions)       2002            2001
                 First Quarter         $119             $7
                 Second Quarter         103             25
                 Third Quarter           90             74
                 Fourth Quarter                         78
                 Year to Date          $312          $ 184

    Allstate Financial Business

                        Allstate Financial Highlights
                                 Quarter Ended          Nine Months Ended
                                 September 30             September 30

     ($ in millions)        Est.                      Est.
                            2002    2001    Change    2002     2001    Change
                             $       $        %        $        $        %
     Statutory Premiums
      and Deposits*        2,958    2,491    18.7     9,073    8,294     9.4
     Allstate Financial
      GAAP Revenues        1,142    1,257    (9.1)    3,657    3,684    (0.7)
     Operating Income
      before
      Restructuring
      Charges                112      135   (17.0)      399      384     3.9
     Restructuring
      Charges After-tax       --        1  (100.0)        1        4   (75.0)
     Operating Income        112      134   (16.4)      398      380     4.7
     Realized Capital
      (Losses) Gains
      After-tax             (103)     (46)  123.9      (192)    (133)   44.4
     Cumulative Effect
      of a Change in
      Accounting
      Principle
      After-tax               --       --      --      (283)      (6)     --
     Net Income                9       88   (89.8)      (77)     241  (132.0)
     Investments
      including
      Separate
      Accounts            65,082   58,655    11.0    65,082   58,655    11.0

    *Statutory premiums and deposits is a measure used by Allstate management
     to analyze sales trends.  Statutory premiums and deposits includes
     premiums on insurance policies and premiums and deposits on annuities
     determined in conformity with statutory accounting practices prescribed
     or permitted by the insurance regulatory authorities of the states in
     which the Company's insurance subsidiaries are domiciled, and all other
     funds received from customers on deposit type products which are treated
     as liabilities, including the net new deposits of Allstate Bank.

    -- Factors contributing to the increase in Allstate Financial statutory
       premiums and deposits during the third quarter of 2002 as compared to
       the same quarter in the prior year included:
                     -- an increase in the retail sales of fixed annuities
                     -- growth in deposits of Allstate Bank

                   This increase was partly offset by:
                     -- a decrease in structured financial product sales,
                        primarily funding agreements, as a result of
                        unfavorable market conditions

    -- Factors contributing to the decline in Allstate Financial operating
       income in the third quarter of 2002 when compared to the same quarter
       in the prior year were:

                     -- Accelerated amortization of deferred acquisition costs
                        (DAC) on variable annuity products totaling $94
                        million, partially offset by lower DAC amortization on
                        fixed annuities and interest sensitive life products
                        resulting from improved margins, improved persistency
                        and other recoveries. The net impact of the
                        accelerated amortization totaled $42 million after-tax
                        or $.06 per diluted share.

                     -- Growth related increases in operating expenses and DAC
                        amortization

                These factors were offset by:

                     -- A positive tax impact due to an adjustment for prior
                        year tax issues totaling $21 million

                     -- An increase in investment and mortality margins

                     -- A change in accounting eliminating the amortization of
                        goodwill in 2002.  Allstate Financial goodwill
                        amortization totaled $7 million in the third quarter
                        of 2001 and $22 million for the first nine months of
                        2001.

    Some further details regarding Allstate Financial's DAC practices and
    variable annuity guaranteed minimum death benefit (GMDB) are:

      -- DAC for certain investment and retirement products is amortized over
         the expected life of the products in relation to the expected gross
         profits. Traditional life, accidental and health products are
         amortized in relation to the expected net premiums, subject to
         recoverability reviews. The recoverability of DAC on certain
         investment and retirement products is reviewed regularly in the
         aggregate using current assumptions.

      -- Allstate Financial's variable annuity DAC amortization methodology
         includes a long-term market return assumption for account values of
         8% after fees. When market returns vary from the 8% long-term
         expectation or mean, Allstate Financial assumes a reversion to this
         mean over a seven-year period, which includes two prior years and
         five future years. The assumed returns over this period are limited
         to a range between 0% to 13.25% after fees. The steep and sustained
         decline in the equity markets for the nine months ending September
         30, 2002 resulted in the acceleration of variable annuity DAC
         amortization by $94 million for the third quarter.  DAC amortization
         from improved persistency on fixed annuities, along with other
         recoveries, partially offset the $94 million acceleration.  Future
         volatility in the equity markets of similar or greater magnitude may
         result in non-symmetrical changes in the amortization of DAC, both
         increases and decreases.

      -- The total DAC asset for all Allstate Financial products as of the end
         of the third quarter is $3.14 billion. DAC for all annuities, both
         fixed and variable, is $966 million at the end of the third quarter,
         which is 3.1% of total annuity account values. DAC for variable
         annuities is $799 million at the end of the third quarter, which is
         6.6% of the variable annuity account values. Approximately two-thirds
         of the variable annuity DAC and three-fourths of fixed annuity DAC is
         amortized during the surrender charge period.

      -- Allstate Financial's guaranteed value in excess of the account value,
         payable if all contract holders were to die as of September 30, 2002,
         is estimated to be $4.53 billion, net of reinsurance.  Approximately
         two-thirds of this exposure is related to the return of the original
         deposits while the remaining one-third is attributable to a death
         benefit greater than the original deposits.  The costs associated
         with GMDBs are included in the DAC amortization model. Generally,
         less DAC is amortized during periods in which GMDBs are higher than
         projected. Net cash payments for GMDBs were $11 million and $31
         million for the quarter and the nine months ended September 30, 2002,
         respectively, net of reinsurance, hedging gains, and other
         contractual arrangements.


This press release contains forward-looking statements about our operating income for 2002 and rate changes in our Property-Liability business. These statements are subject to the Private Securities Litigation Reform Act of 1995 and are based on management's estimates, assumptions and projections. Actual results may differ materially from those projected in the forward-looking statements for a variety of reasons. Projected weighted average rate changes in our Property-Liability business may be lower than projected due to a decrease in the number of policies in force. Loss costs in our Property- Liability business, including losses due to catastrophes such as hurricanes and earthquakes, may exceed management's projections. Competitive pressures could lead to sales of Property-Liability products, including private passenger auto and homeowners insurance, that are lower than projected by management, due to our increased prices and our modified underwriting practices. Investment income may not meet management's projections due to poor stock market performance or lower returns on the fixed income portfolio due to worsening credit conditions. Readers are encouraged to review the other risk factors facing Allstate that we disclose in our current, quarterly and annual reports to the Securities and Exchange Commission on Forms 8-K, 10-Q and 10-K. We undertake no obligation to publicly correct or update any forward-looking statements. This press release contains unaudited financial information.

The supplemental operating information provided allows for additional analysis of results of operations. The after-tax effects of realized capital gains and losses, gain (loss) on disposition of operations, dividends on preferred securities of subsidiary trust and the cumulative effect of a change in accounting principle have been excluded from operating income due to the volatility between periods and because such data is often excluded when evaluating the overall financial performance of insurers. After-tax realized capital gains and losses are presented net of the effects of Allstate Financial's deferred policy acquisition cost amortization to the extent that such effects resulted from the recognition of realized capital gains and losses. Operating income should not be considered as a substitute for any generally accepted accounting principles (GAAP) measure of performance. The method of calculating operating income may be different from the method used by other companies and therefore comparability may be limited.

The Allstate Corporation (NYSE: ALL - News) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate®" slogan, Allstate provides insurance products to more than 16 million households and has approximately 12,500 exclusive agents and financial specialists in the U.S. and Canada. Customers can access Allstate products and services through Allstate agents, or in select states at allstate.com and 1-800-Allstate(SM). Encompass(SM) and Deerbrook® Insurance brand property and casualty products are sold exclusively through independent agents. Allstate Financial Group includes the businesses that provide life insurance, retirement and investment products, through Allstate agents, workplace marketing, independent agents, banks and securities firms.

The Allstate Corporation prepares an interim investor supplement, containing standard information that is not totally available at the time of the earnings release. The supplement is posted to the company's website and will be updated periodically over the next 30 days, and can be accessed by going to the Allstate web site at allstate.com and clicking on "About Allstate." From there, go to the "Find Financial Information" button.

      THE ALLSTATE CORPORATION
      CONSOLIDATED STATEMENTS OF OPERATIONS


                                       Three Months Ended
                                          September 30,


     ($ in millions except            Est.                         Percent
      per share data)                 2002            2001         Change


    Revenues
      Property-liability
       insurance premiums          $  5,904        $  5,597           5.5
      Life and annuity premiums
       and contract charges             512             580         (11.7)
      Net investment income           1,242           1,200           3.5
      Realized capital gains
       and losses                      (419)           (204)        105.4
        Total revenues                7,239           7,173           0.9

    Costs and expenses
      Property-liability insurance
       claims and claims expense      4,342           4,474          (3.0)
      Life and annuity contract
       benefits                         388             452         (14.2)
      Interest credited to
       contractholder funds             464             434           6.9
      Amortization of deferred policy
       acquisition costs                966             863          11.9
      Operating costs and expenses      710             641          10.8
      Amortization of goodwill          ---              14        (100.0)
      Restructuring and related
       charges                           40              10           ---
      Interest expense                   67              63           6.3
        Total costs and expenses      6,977           6,951           0.4

    Loss on disposition of
     operations                         ---             (53)       (100.0)

    Income from operations before
     income tax benefit, dividends
     on preferred securities and
     cumulative effect of change in
     accounting principle, after-tax    262             169          55.0

    Income tax benefit                  (20)            (67)        (70.1)

    Income before dividends on
     preferred securities and
     cumulative effect of change in
     accounting principle, after-tax    282             236          19.5

    Dividends on preferred securities
     of subsidiary trusts                (2)            (10)        (80.0)

    Cumulative effect of change in
     accounting principle, after-tax    ---             ---           ---

    Net income                     $    280        $    226          23.9

    Net income per share - Basic   $   0.39        $   0.32

    Weighted average shares - Basic   705.4           717.3

    Net income per share -
     Diluted                       $   0.39        $   0.32

    Weighted average shares -
     Diluted                          708.1           719.7


                                         Nine Months Ended
                                           September 30,


    ($ in millions except             Est.                          Percent
     per share data)                  2002            2001          Change

    Revenues
      Property-liability
       insurance premiums          $ 17,411        $ 16,553           5.2
      Life and annuity premiums
       and contract charges           1,632           1,665          (2.0)
      Net investment income           3,624           3,615           0.2
      Realized capital gains and
       losses                          (675)           (326)        107.1
        Total revenues               21,992          21,507           2.3

    Costs and expenses
      Property-liability insurance
       claims and claims expense     13,204          13,093           0.8
      Life and annuity contract
       benefits                       1,213           1,270          (4.5)
      Interest credited to
       contractholder funds           1,316           1,292           1.9
      Amortization of deferred
       policy acquisition costs       2,777           2,566           8.2
      Operating costs and expenses    2,008           1,985           1.2
      Amortization of goodwill          ---              40        (100.0)
      Restructuring and related
       charges                           95              22           ---
      Interest expense                  204             186           9.7
        Total costs and expenses     20,817          20,454           1.8

    Gain (loss) on disposition of
     operations                           7             (63)       (111.1)

    Income from operations before
     income tax expense, dividends on
     preferred securities and
     cumulative effect of change in
     accounting principle, after-tax  1,182             990          19.4

    Income tax expense                  125              58         115.5

    Income before dividends on
     preferred securities and
     cumulative effect of change in
     accounting principle, after-tax  1,057             932          13.4

    Dividends on preferred securities
     of subsidiary trusts                (7)            (29)        (75.9)

    Cumulative effect of change in
     accounting principle, after-tax   (331)             (9)          ---

    Net income                     $    719        $    894         (19.6)


    Net income per share - Basic   $   1.01        $   1.24

    Weighted average shares - Basic   708.6           722.8

    Net income per share -
     Diluted                       $   1.01        $   1.23

    Weighted average shares -
     Diluted                          711.3           726.2


           THE ALLSTATE CORPORATION
            CONTRIBUTION TO INCOME

                                                  Three Months Ended
                                                    September 30,

    ($ in millions except per share data)         Est.                 Percent
                                                  2002        2001     Change
    Contribution to income
      Operating income                         $    548    $    401      36.7
      Realized capital gains and losses            (266)       (131)    103.1
      Loss on disposition of
       operations                                   ---         (34)   (100.0)
      Dividends on preferred securities
       of subsidiary trusts                          (2)        (10)    (80.0)
      Cumulative effect of change in
       accounting principle                         ---         ---       ---

      Net income                               $    280    $    226      23.9

      Operating income before the impact of
       restructuring and related charges       $    574    $    407      41.0

    Income per share (Diluted)
      Operating income                         $   0.77    $   0.56      37.5
      Realized capital gains and losses           (0.38)      (0.18)    111.1
      Loss on disposition of
       operations                                   ---       (0.05)   (100.0)
      Dividends on preferred securities
       of subsidiary trusts                         ---       (0.01)   (100.0)
      Cumulative effect of change in
       accounting principle                         ---         ---       ---

      Net income                               $   0.39    $   0.32      21.9

      Operating income before the impact of
       restructuring and related charges       $   0.81    $   0.57      42.1

      Book value per share - Diluted           $  25.22    $  24.16       4.4


                                                 Nine Months Ended
                                                   September 30,

    ($ in millions except per share data)         Est.                 Percent
                                                  2002        2001     Change
    Contribution to income
      Operating income                         $  1,489    $  1,183      25.9
      Realized capital gains and losses            (437)       (211)    107.1
      Gain (loss) on disposition of
       operations                                     5         (40)   (112.5)
      Dividends on preferred securities
       of subsidiary trusts                          (7)        (29)    (75.9)
      Cumulative effect of change in
       accounting principle                        (331)         (9)      ---

      Net income                               $    719    $    894     (19.6)

      Operating income before the impact of
       restructuring and related charges       $  1,551    $  1,197      29.6

    Income per share (Diluted)
      Operating income                         $   2.09    $   1.63      28.2
      Realized capital gains and losses           (0.62)      (0.29)    113.8
      Gain (loss) on disposition of
       operations                                  0.01       (0.06)   (116.7)
      Dividends on preferred securities
       of subsidiary trusts                       (0.01)      (0.04)    (75.0)
      Cumulative effect of change in
       accounting principle                       (0.46)      (0.01)      ---

      Net income                               $   1.01    $   1.23     (17.9)

      Operating income before the impact of
       restructuring and related charges       $   2.18    $   1.65      32.1

      Book value per share - Diluted           $  25.22    $  24.16       4.4


                THE ALLSTATE CORPORATION
               SUPPLEMENTARY INFORMATION

                                                        Three Months Ended
                                                           September 30,

                                                       Est.
     ($ in millions)                                   2002           2001


    Property-Liability
      Premiums written                              $  6,305       $  5,846

      Premiums earned                               $  5,904       $  5,597
      Claims and claims expense                        4,342          4,474
      Amortization of deferred policy acquisition
       costs                                             814            776
      Operating costs and expenses                       548            499
      Amortization of goodwill                           ---              6
      Restructuring and related charges                   40              8
      Underwriting income (loss)                         160           (166)

      Net investment income                              429            432
      Income tax expense (benefit) on operations         127            (24)

      Operating income                                   462            290

      Realized capital gains and losses, after-tax      (160)           (85)

      Loss on disposition of operations,
       after-tax                                         ---            (34)

      Net income                                    $    302       $    171

      Catastrophe losses                            $     96       $    142

      Operating ratios
        Claims and claims expense ratio                 73.6           80.0
        Expense ratio                                   23.7           23.0
        Combined ratio                                  97.3          103.0

        Effect of catastrophe losses on combined
         ratio                                           1.6            2.5

        Effect of restructuring and related
         charges on combined ratio                       0.7            0.1

    Allstate Financial
      Statutory premiums and deposits               $  2,958       $  2,491
      Investments including
       Separate Account assets                      $ 65,082       $ 58,655

      Premiums and contract charges                 $    512       $    580
      Net investment income                              794            747
      Contract benefits                                  388            452
      Interest credited to contractholder funds          464            434
      Amortization of deferred policy acquisition
       costs                                             158             83
      Operating costs and expenses                       159            142
      Amortization of goodwill                           ---              7
      Restructuring and related charges                  ---              2
      Income tax expense on operations                    25             73

      Operating income                                   112            134

      Realized capital gains and losses, after-tax      (103)           (46)

      Net income                                    $      9       $     88

    Corporate and Other
      Net investment income                         $     19       $     21
      Operating costs and expenses                        69             64
      Amortization of goodwill                           ---              1
      Income tax benefit on operations                   (24)           (21)

      Operating loss                                     (26)           (23)

      Realized capital gains and losses, after-tax        (3)           ---

      Dividends on preferred securities
       of subsidiary trusts                               (2)           (10)

      Net loss                                      $    (31)      $    (33)


                                                         Nine Months Ended
                                                           September 30,

                                                       Est.
     ($ in millions)                                   2002           2001

    Property-Liability
      Premiums written                              $ 18,063       $ 17,014

      Premiums earned                               $ 17,411       $ 16,553
      Claims and claims expense                       13,204         13,093
      Amortization of deferred policy acquisition
       costs                                           2,399          2,285
      Operating costs and expenses                     1,532          1,542
      Amortization of goodwill                           ---             16
      Restructuring and related charges                   94             16
      Underwriting income (loss)                         182           (399)

      Net investment income                            1,256          1,334
      Income tax expense on operations                   267             66

      Operating income                                 1,171            869

      Realized capital gains and losses, after-tax      (240)           (79)

      Gain (loss) on disposition of operations,
       after-tax                                           5            (40)

      Cumulative effect of change in accounting
       principles, after-tax                             (48)            (3)

      Net income                                    $    888       $    747

      Catastrophe losses                            $    494       $    761

      Operating ratios
        Claims and claims expense ratio                 75.9           79.1
        Expense ratio                                   23.1           23.3
        Combined ratio                                  99.0          102.4

        Effect of catastrophe losses on combined
         ratio                                           2.8            4.6

        Effect of restructuring and related
         charges on combined ratio                       0.5            0.1

    Allstate Financial
      Statutory premiums and deposits               $  9,073       $  8,294
      Investments including
       Separate Account assets                      $ 65,082       $ 58,655

      Premiums and contract charges                 $  1,632       $  1,665
      Net investment income                            2,313          2,218
      Contract benefits                                1,213          1,270
      Interest credited to contractholder funds        1,316          1,292
      Amortization of deferred policy acquisition
       costs                                             380            273
      Operating costs and expenses                       472            439
      Amortization of goodwill                           ---             22
      Restructuring and related charges                    1              6
      Income tax expense on operations                   165            201

      Operating income                                   398            380

      Realized capital gains and losses, after-tax      (192)          (133)

      Cumulative effect of change in accounting
       principle, after-tax                             (283)            (6)

      Net (loss) income                             $    (77)      $    241

    Corporate and Other
      Net investment income                         $     55       $     63
      Operating costs and expenses                       208            190
      Amortization of goodwill                           ---              2
      Income tax benefit on operations                   (73)           (63)

      Operating loss                                     (80)           (66)

      Realized capital gains and losses, after-tax        (5)             1

      Dividends on preferred securities
       of subsidiary trusts                               (7)           (29)

      Net loss                                      $    (92)      $    (94)


       THE ALLSTATE CORPORATION
       UNDERWRITING RESULTS BY AREA OF BUSINESS

                                        Three Months Ended
     ($ in millions)                       September 30,

                                       Est.                         Percent
                                       2002           2001          Change

    Consolidated Underwriting
     Summary
      Allstate Protection          $    269        $  (161)           ---
      Discontinued lines and
       coverages                       (109)            (5)           ---
      Underwriting income (loss)   $    160        $  (166)        (196.4)

    Allstate Protection Underwriting
     Summary
      Premiums written             $  6,303        $  5,845           7.8
      Premiums earned              $  5,902        $  5,595           5.5
      Claims and claims expense       4,232           4,469          (5.3)
      Amortization of deferred policy
       acquisition costs                814             776           4.9
      Other costs and expenses          547             497          10.1
      Amortization of goodwill          ---               6        (100.0)
      Restructuring and related
       charges                           40               8           ---
      Underwriting income (loss)   $    269        $   (161)          ---

      Catastrophe losses           $     96        $    142         (32.4)

      Operating ratios
        Claims and claims expense
         ratio                         71.7            79.9
        Expense ratio                  23.7            23.0
        Combined ratio                 95.4           102.9

        Effect of catastrophe losses
         on combined ratio              1.6             2.5

        Effect of restructuring
         charges on combined ratio      0.7             0.1

    Discontinued Lines and Coverages
     Underwriting Summary
      Premiums written             $      2        $      1         100.0
      Premiums earned              $      2        $      2           ---
      Claims and claims expense         110               5           ---
      Other costs and expenses            1               2         (50.0)
        Underwriting loss          $   (109)       $     (5)          ---


                                       Nine Months Ended
     ($ in millions)                     September 30,

                                       Est.                        Percent
                                       2002           2001         Change
    Consolidated Underwriting
     Summary
      Allstate Protection          $    301        $   (386)       (178.0)
      Discontinued lines
       and coverages                   (119)            (13)          ---
      Underwriting income (loss)   $    182        $   (399)       (145.6)

    Allstate Protection
     Underwriting Summary
      Premiums written             $ 18,056        $ 17,006           6.2
      Premiums earned              $ 17,403        $ 16,542           5.2
      Claims and claims expense      13,082          13,076           ---
   Amortization of deferred
      policy acquisition costs        2,399           2,285           5.0
      Other costs and expenses        1,527           1,535          (0.5)
      Amortization of goodwill          ---              16        (100.0)
      Restructuring and related
       charges                           94              16           ---
      Underwriting income (loss)   $    301        $   (386)       (178.0)

      Catastrophe losses           $    494        $    761         (35.1)

      Operating ratios
        Claims and claims expense
         ratio                         75.2            79.0
        Expense ratio                  23.1            23.3
        Combined ratio                 98.3           102.3

        Effect of catastrophe losses
         on combined ratio              2.8             4.6

        Effect of restructuring
         charges on combined ratio      0.5             0.1

    Discontinued Lines and Coverages
     Underwriting Summary
      Premiums written             $      7        $      8         (12.5)
      Premiums earned              $      8        $     11         (27.3)
      Claims and claims expense         122              17           ---
      Other costs and expenses            5               7         (28.6)
        Underwriting loss          $   (119)       $    (13)          ---


            THE ALLSTATE CORPORATION
       PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT

                                        Three Months Ended
                                          September 30,

                                      Est.                          Percent
     ($ in millions)                  2002            2001          Change

    ALLSTATE-BRAND
      Standard auto                  $3,314          $3,104           6.8
      Non-standard auto                 584             650         (10.2)
      Involuntary auto                   54              37          45.9
      Commercial lines                  191             176           8.5
      Homeowners                      1,327           1,095          21.2
      Other personal lines              330             316           4.4
                                      5,800           5,378           7.8
    IVANTAGE
      Standard auto                     314             306           2.6
      Non-standard auto                  36              11           ---
      Involuntary auto                    3               4         (25.0)
      Homeowners                        128             123           4.1
      Other personal lines               22              23          (4.3)
                                        503             467           7.7

     ALLSTATE PROTECTION              6,303           5,845           7.8

     DISCONTINUED LINES
      AND COVERAGES                       2               1         100.0

     PROPERTY-LIABILITY              $6,305          $5,846           7.9


                                        Nine Months Ended
                                          September 30,

                                      Est.                          Percent
     ($ in millions)                  2002            2001          Change

    ALLSTATE-BRAND
      Standard auto                  $9,650          $9,051           6.6
      Non-standard auto               1,813           2,027         (10.6)
      Involuntary auto                  151             117          29.1
      Commercial lines                  580             540           7.4
      Homeowners                      3,480           2,942          18.3
      Other personal lines              942             939           0.3
                                     16,616          15,616           6.4
    IVANTAGE
      Standard auto                     919             918           0.1
      Non-standard auto                  80              34         135.3
      Involuntary auto                    5              15         (66.7)
      Homeowners                        368             348           5.7
      Other personal lines               68              75          (9.3)
                                      1,440           1,390           3.6

     ALLSTATE PROTECTION             18,056          17,006           6.2

     DISCONTINUED LINES
      AND COVERAGES                       7               8         (12.5)

     PROPERTY-LIABILITY             $18,063         $17,014           6.2

                THE ALLSTATE CORPORATION
       ALLSTATE PROTECTION MARKET SEGMENT ANALYSIS

                            Three Months Ended September 30,
                  Est.                 Est.         Est.          Est.
    ($ in         2002      2001       2002  2001   2002   2001   2002   2001
    millions)
                                                   Loss Ratio
                                                   Excluding the
                                                    Effect of
                 Premiums Earned      Loss Ratio    CAT Losses   Expense Ratio

    ALLSTATE-
     BRAND

     Standard
      auto      $3,203    $3,013      72.8   73.6   72.7   74.2
     Non-
      standard
      auto         599       669      68.3   85.9   68.1   84.5
     Homeowners  1,091       965      71.1   94.5   64.4   85.4
     Other (A)     543       497      66.1   77.3   63.9   67.2
      Sub-total  5,436     5,144      71.3   79.5   69.7   76.9   22.9   22.5


    IVANTAGE

     Standard
      auto         298       297      74.8   89.6   74.5   89.9
     Non-
      standard
      auto          26        11     130.8   27.3  130.8   27.3
     Homeowners    118       116      73.7   79.3   67.8   69.8
     Other (A)      24        27      54.2   70.4   54.2   66.7
      Sub-total    466       451      76.6   84.3   74.9   81.8   33.5   29.3

    ALLSTATE
     PROTECTION $5,902    $5,595      71.7   79.9   70.1   77.4   23.7   23.0


                          Nine Months Ended September 30,
                 Est.                 Est.          Est.          Est.
    ($ in        2002      2001       2002   2001   2002   2001   2002   2001
    millions)
                                                    Loss Ratio
                                                   Excluding the
                                                    Effect of
                Premiums Earned       Loss Ratio    CAT Losses   Expense Ratio

    ALLSTATE-
     BRAND

     Standard
      auto      $9,448    $8,808      74.2   73.9   73.5   72.4
     Non-
      standard
      auto       1,844     2,049      73.2   83.4   72.9   82.4
     Homeowners  3,139     2,821      80.6   92.0   70.1   75.6
     Other (A)   1,595     1,486      70.5   75.6   67.6   70.2
      Sub-total 16,026    15,164      74.9   78.7   72.2   74.1   22.3   22.5

    IVANTAGE

     Standard
      auto         896       910      76.1   82.0   75.3   80.8
     Non-
      standard
      auto          57        42     117.5   76.2  117.5   76.2
     Homeowners    350       345      85.7   81.7   73.4   65.5
     Other (A)      74        81      29.7  106.2   27.0  102.5
      Sub-total  1,377     1,378      77.8   83.2   74.0   78.1   32.7   31.5

    ALLSTATE
     PRO-
     TECTION   $17,403   $16,542      75.2   79.0   72.4   74.4   23.1   23.3

     (A) Other includes involuntary auto, commercial coverages and other
         personal lines.