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Allstate To Acquire Pembridge, Canadian Non-Standard Auto Insurer

27 January 1998

Allstate To Acquire Pembridge, Canadian Non-Standard Auto Insurer

    NORTHBROOK, Ill., & TORONTO, Canada, Jan. 27 -- The Allstate
Corporation and Pembridge Inc. today jointly announced that
Allstate would make a cash offer to purchase all of the outstanding shares of
Toronto-based Pembridge Inc., Canada's largest non-standard auto insurer, for
Cdn. $20 per share.  The aggregate value of the transaction will be
approximately Cdn. $400 million.
    Allstate has entered into agreements with respect to its bid with both
Pembridge and certain shareholders of the company.   Pembridge's directors
have agreed to recommend that shareholders accept Allstate's offer.  It is a
condition of the offer that shareholders with approximately 25% of the
outstanding Pembridge shares have agreed to tender their shares into the bid,
subject to conditions.
    "The acquisition of Pembridge Inc. will expand Allstate's presence in
Canada by significantly increasing our non-standard auto market share and
adding to our broker distribution network," said Allstate Chairman and Chief
Executive Officer Jerry D. Choate.  "This transaction supports Allstate's
growth strategy of increasing value through selected acquisitions in our core
product lines, both internationally and domestically."
    Pembridge Inc. and Pafco Insurance Co. President and Chief Executive
Officer Douglas McIntyre, who will continue in those positions, said,
"Allstate's interest in our company provides recognition of our success in
building the company.  We will be better able to serve our policy holders and
independent brokers in the future as part of a large international insurance
group."
    Pembridge Inc. specializes in the underwriting and marketing of non-
standard automobile insurance and provides property and casualty insurance to
higher-risk businesses.  Pafco Insurance Company, Pembridge's Canadian
subsidiary, primarily writes non-standard auto insurance through approximately
1,800 independent brokers throughout Canada.  Pembridge underwrites and
markets similar products through its U.S. subsidiaries, Florida-based American
Surety & Casualty Co. and Illinois-based Pembridge General Insurance Co.  In
Canada, the non-standard auto market offers insurance coverage to drivers with
violations or accidents on their driving records.
    In the United States, Allstate sells non-standard insurance through two
subsidiaries.  The Allstate Indemnity Insurance Company, the largest non-
standard auto insurance company in the U.S. with a 17 percent market share,
sells its products through Allstate agents.  The Deerbrook Insurance Company
sells non-standard auto insurance through independent agencies.
    The offer will be conditional upon at least 90% of the outstanding
Pembridge shares being tendered into Allstate's bid and Allstate receiving the
required regulatory approvals.  Allstate expects to create a new Canadian
subsidiary which will make the offer by mailing an offering circular to
Pembridge shareholders within the next few weeks.
    The Allstate Corporation, the parent of Allstate Insurance Company, is the
largest publicly held personal lines insurance company in the U.S., insuring
one of every eight homes and automobiles.  The company provides insurance for
more than 20 million customers and has more than 15,000 agents in the U.S. and
Canada.  Allstate is also a major life insurer.

SOURCE  The Alllstate Corporation