UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) August 4, 2010

The Allstate Corporation

(Exact name of registrant as specified in charter)

Registrant’s telephone number, including area code  (847) 402-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2. — Financial Information

Item 2.02.             Results of Operations and Financial Condition.

On August 4, 2010, the registrant issued a press release announcing its financial results for the second quarter of 2010, and the availability of the registrant’s second quarter investor supplement on the registrant’s web site.  The press release and the investor supplement are furnished as Exhibits 99.1 and 99.2 to this report.  The information contained in the press release and the investor supplement are furnished and not filed pursuant to instruction B.2 of Form 8-K.

Section 9. — Financial Statements and Exhibits

Item 9.01.              Financial Statements and Exhibits.

(d)  Exhibits

99.1                                                       Registrant’s press release dated August 4, 2010

99.2                                                       Second quarter 2010 Investor Supplement of The Allstate Corporation

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

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Exhibit 99.1

NEWS

FOR IMMEDIATE RELEASE

Allstate Second Quarter 2010 Results Reflect Positive Trends

NORTHBROOK, Ill., August 4, 2010 — The Allstate Corporation (NYSE: ALL) today reported financial results for the second quarter of 2010:

Consolidated Highlights

* Measures used in this release that are not based on accounting principles generally accepted in the United States of America (“non-GAAP”) are defined and reconciled to the most directly comparable GAAP measure and operating measures are defined in the “Definitions of Non-GAAP and Operating Measures” section of this document.

“We made continued progress in executing our strategies and achieving our 2010 goals in the second quarter,” said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation.  “Profitability at Allstate Protection met our underlying combined ratio outlook for the year.  Implementation of growth initiatives reduced the impact of catastrophe risk management and profitability actions, but has not yet generated sufficient volume to increase overall policies in force. Allstate Financial’s operating income significantly rebounded reflecting progress on its strategic repositioning and the benefit of reserve actions.  Strong investment results reflect our risk mitigation and return optimization strategies.

“Operating income was $0.81 per diluted share for the quarter compared to $0.55 per diluted share for the same quarter last year due to a decline in catastrophe losses from a record second quarter level in 2009. Net income was $0.27 per diluted share as derivative losses reduced earnings.  Derivative losses, however, were more than offset by corresponding increases in investment valuations so that book value per share increased by 3% in the quarter,” said Wilson.

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Consolidated Financial Results

Allstate’s second quarter 2010 operating income rose to $441 million compared to $297 million in the same period of 2009, reflecting improved results in both Property-Liability and Allstate Financial.  Net income was $145 million in the second quarter of 2010 compared to $389 million in the second quarter of 2009 primarily due to realized capital losses in the 2010 quarter versus realized capital gains in the prior year period.  Realized capital losses in the second quarter of 2010 reflect risk management actions, including derivative losses that were offset by increased portfolio valuations.  Book value rose to $33.24 per share at June 30, 2010 compared to $32.26 at March 31, 2010 and $27.87 at June 30, 2009, reflecting higher shareholders’ equity primarily resulting from increased market valuations for fixed income investments.

Property-Liability Combined Ratio Reflects Continued Strong Auto Performance

Property-Liability results for the second quarter of 2010 reflect Allstate Protection’s implementation of actions to profitably grow standard auto and improve homeowners returns.  Property-Liability premiums written increased 0.4% in the second quarter of 2010 compared to the prior year second quarter.  Allstate brand growth of 1.6% contributed to the premium increase, partially offset by a 20.4% Encompass brand decline when compared to the second quarter a year ago.  Actions to improve Encompass profitability negatively impacted results.

Allstate’s Property-Liability business produced an underlying combined ratio within the company’s full-year outlook range of 88 to 90.  The underlying combined ratio, which excludes catastrophes and prior year reserve reestimates, was 88.1 in the second quarter of 2010 compared to 87.2 in the same period of 2009, primarily due to a higher expense ratio.  The recorded combined ratio was 96.8 for the second quarter of 2010, a 3.2 point improvement from the second quarter of 2009.

Catastrophe losses totaled $636 million during the second quarter of 2010, reflecting 30 events with losses of $758 million, offset by favorable reserve reestimates of $39 million on first quarter 2010 events and $83 million on prior years’ events.  This compares to catastrophe losses of $818 million for the second quarter of 2009.  Catastrophe losses added 9.8 points to the combined ratio during the second quarter of 2010.  Although lower than the record second quarter impact in 2009 of 12.5 points, it was 3.2 points higher than Allstate’s 19-year average for a second quarter of 6.6 points.

Allstate brand standard auto premiums written* increased 1.9% for the second quarter of 2010 compared to the prior year second quarter, due to a 3.3% increase in average premium.  Increased average premium was offset by a 1.7% decline in policies in force as the rate of new business was not sufficient to overcome the business lost at renewal.  Standard auto retention was comparable to the prior year second quarter at 89.0 despite a slight decline in Allstate’s customer loyalty index score during the quarter.  New issued applications increased 0.4% compared to the prior year second quarter.  The Allstate brand standard auto combined ratio was 94.5, a decline of 0.4 points from the second quarter of 2009, due to growth in earned premiums as well as favorable prior year reserve reestimates.

Allstate brand homeowners premiums written for the second quarter of 2010 increased 2.2% compared to the same period a year ago, as a 6.1% increase in average premium was partly offset by a 4.0% decline in policies in force.  The combined ratio was 104.4 in the second quarter of 2010 compared to 116.3 in the second quarter a year ago, reflecting lower catastrophe losses and lower non-catastrophe claim costs.  Rate increases averaging 11.3% in 14 states were approved during the second quarter, reflecting actions to improve returns and lessen the volatility of the homeowners results.

Allstate Financial Strategy Gaining Traction

Allstate Financial made significant progress on reinventing its business model during the second quarter.  The goals are to produce higher returns, reduce concentrations in products with returns dependent on investment spread, and serve Allstate customers by focusing on Allstate agencies and expanding Allstate Workplace Division.

Premiums and deposits* on mortality and morbidity (underwritten) products increased 12.1% when compared to the second quarter of 2009, including increases in policies sold through the Allstate Workplace Division and

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Allstate agencies.  Consistent with the strategy, premiums and deposits on fixed annuity sales declined by 60.2% compared to the prior year period.

Allstate Financial operating income was $125 million in the second quarter of 2010 compared to $65 million in the prior year second quarter.  The increase was due to lower amortization of deferred acquisition costs (DAC) and a higher investment spread, partly offset by a lower benefit spread.  DAC amortization declined primarily due to a re-estimation of reserves and lower amortization on annuities.  The investment spread increased to $134 million in the second quarter of 2010 from $63 million in the prior year second quarter.  The change was due to lower net investment income being more than offset by decreased interest credited to contractholder funds, which includes lower amortization of deferred sales inducements.  The benefit spread declined 24.4% from the prior year second quarter due to the re-estimation of reserves and adverse mortality experience, partly offset by growth in accident and health products.  The re-estimation of reserves related to the use of refined policy level information and assumptions for interest-sensitive life insurance and immediate annuities, resulting in a net reserve increase of $27 million, after-tax, and a decrease in DAC amortization of $32 million, after-tax, for a net favorable impact to operating income of $5 million, after-tax.

Allstate Financial reported a net loss of $107 million in the second quarter of 2010 compared to net income of $19 million in the 2009 second quarter.  The second quarter of 2010 net loss reflected $226 million of after-tax realized capital losses including the impact of related deferred acquisition costs and deferred sales inducements.  The second quarter of 2009 reflected an after-tax realized capital loss of $49 million, including the impact of deferred acquisition costs and deferred sales inducements.

Proactive Investment Strategies Provide Returns

Allstate’s consolidated investment portfolio was $99.9 billion at June 30, 2010, slightly lower than at March 31, 2010, as improved valuations and operating cash flows were offset by reductions in Allstate Financial’s spread-based business.  Valuation increases were primarily driven by the effect of declining interest rates on fixed income securities, and resulted in an improvement of $1.2 billion in the net unrealized position during the second quarter.  Allstate’s net unrealized gain at June 30, 2010 was $400 million, pre-tax, compared to a net unrealized loss of $849 million, pre-tax, at March 31, 2010 and a net unrealized loss of $7.3 billion, pre-tax, at June 30, 2009.

Net realized capital loss for the second quarter of 2010 was $451 million, pre-tax, compared to a net realized capital gain of $328 million in the prior year second quarter, with derivatives being responsible for the majority of the $779 million difference.  Derivative net losses totaled $310 million in the second quarter of 2010 compared to a gain of $419 million in the second quarter of 2009, driven primarily by Allstate’s risk management actions.  Net realized capital loss for the second quarter of 2010 also reflected $239 million of impairment write-downs and $67 million of intent write-downs primarily related to residential and commercial real estate exposure, partly offset by net realized gains of $145 million from sales.

Derivative net losses were the result of interest rate and equity market declines.  Declining interest rates resulted in $259 million of losses from Allstate’s risk management actions.  However, the loss was less than the increase in fixed income valuations during the period.  Declining equity markets resulted in derivative losses of $106 million from equity exposures embedded in fixed income securities, partly offset by $82 million in gains from equity market hedges.

As part of the company’s ongoing strategy to manage exposure to certain portfolio segments, reductions of municipal fixed income securities totaled $1.6 billion of amortized cost and commercial real estate totaled $966 million of amortized cost during the second quarter of 2010.  In addition, a lower allocation to equity securities was maintained while the market experienced a significant downturn in the quarter.

Net investment income for the second quarter of 2010 was $1.0 billion, 5.3% less than the second quarter of 2009 and consistent with the first quarter of 2010.  The decline from the prior year second quarter primarily resulted from lower short-term interest rates, risk reduction actions related to municipal bonds and commercial real estate, and duration-shortening actions taken to protect the portfolio from rising interest rates.  Net investment income in the Property-Liability portfolio totaled $310 million in the second quarter of 2010, a 7.2% decline from the second quarter of 2009, but a 2.0% increase from the first quarter of 2010.  Allstate Financial’s net investment income was $723 million, a 5.4% decline from the second quarter of 2009 and a 1.1% decline from the first quarter of 2010.

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Strong Capital Position

“The combination of our proactive strategies and favorable investment results improved book value,” said Don Civgin, senior vice president and chief financial officer.

Book value per share grew to $33.24 at June 30, 2010 compared to $32.26 at March 31, 2010 and $27.87 at June 30, 2009.  The book value increases reflected higher shareholders’ equity, primarily resulting from improved investment valuations.  Statutory surplus at June 30, 2010 was an estimated $14.9 billion for Allstate Insurance Company, including $3.2 billion at Allstate Life Insurance Company.  This compares to statutory surplus of $15.4 billion for Allstate Insurance Company at March 31, 2010 and $13.8 billion at June 30, 2009.  The statutory surplus reduction from March 31, 2010 to June 30, 2010 includes a $200 million dividend from Allstate Insurance Company to the holding company.  A total of $3.1 billion in deployable assets were available at the holding company level at June 30, 2010.

*     *     *     *     *

Visit www.allstateinvestors.com to view additional information about Allstate’s second quarter results, including a webcast of its quarterly conference call.  The conference call will be held at 9 a.m. ET on Thursday, August 5, 2010.

The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer.  Widely known through the “You’re In Good Hands With Allstate®” slogan, Allstate is reinventing protection and retirement to help more than 17 million households insure what they have today and better prepare for tomorrow.  Consumers access Allstate insurance products (auto, home, life and retirement) and services through Allstate agencies, independent agencies, and Allstate exclusive financial representatives in the U.S. and Canada, as well as via www.allstate.com and 1-800 Allstate®.

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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THE ALLSTATE CORPORATION

SEGMENT RESULTS

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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Definitions of Non-GAAP and Operating Measures

We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP and operating financial measures.  Our methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

Operating income is net income (loss), excluding:

·      realized capital gains and losses, after-tax, except for periodic settlements and accruals on non-hedge derivative instruments, which are reported with realized capital gains and losses but included in operating income,

·      amortization of DAC and DSI, to the extent they resulted from the recognition of certain realized capital gains and losses,

·      gain (loss) on disposition of operations, after-tax, and

·      adjustments for other significant non-recurring, infrequent or unusual items, when (a) the nature of the charge or gain is such that it is reasonably unlikely to recur within two years, or (b) there has been no similar charge or gain within the prior two years.

Net income (loss) is the GAAP measure that is most directly comparable to operating income.

We use operating income as an important measure to evaluate our results of operations.  We believe that the measure provides investors with a valuable measure of the company’s ongoing performance because it reveals trends in our insurance and financial services business that may be obscured by the net effect of realized capital gains and losses, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items.  Realized capital gains and losses and gain (loss) on disposition of operations may vary significantly between periods and are generally driven by business decisions and external economic developments such as capital market conditions, the timing of which is unrelated to the insurance underwriting process.  Consistent with our intent to protect results or earn additional income, operating income includes periodic settlements and accruals on certain derivative instruments that are reported in realized capital gains and losses because they do not qualify for hedge accounting or are not designated as hedges for accounting purposes.  These instruments are used for economic hedges and to replicate fixed income securities, and by including them in operating income, we are appropriately reflecting their trends in our performance and in a manner consistent with the economically hedged investments, product attributes (e.g., net investment income and interest credited to contractholder funds) or replicated investments.  Non-recurring items are excluded because, by their nature, they are not indicative of our business or economic trends.  Accordingly, operating income excludes the effect of items that tend to be highly variable from period to period and highlights the results from ongoing operations and the underlying profitability of our business.  A byproduct of excluding these items to determine operating income is the transparency and understanding of their significance to net income variability and profitability while recognizing these or similar items may recur in subsequent periods.  Operating income is used by management along with the other components of net income (loss) to assess our performance.  We use adjusted measures of operating income and operating income per diluted share in incentive compensation.  Therefore, we believe it is useful for investors to evaluate net income (loss), operating income and their components separately and in the aggregate when reviewing and evaluating our performance.  We note that investors, financial analysts, financial and business media organizations and rating agencies utilize operating income results in their evaluation of our and our industry’s financial performance and in their investment decisions, recommendations and communications as it represents a reliable, representative and consistent measurement of the industry and the company and management’s performance.  We note that the price to earnings multiple commonly used by insurance investors as a forward-looking valuation technique uses operating income as the denominator.  Operating income should not be considered as a substitute for net income (loss) and does not reflect the overall profitability of our business.

The following tables reconcile operating income and net income (loss) for the three months and six months ended June 30, 2010 and 2009.

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