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): July 30, 2014

THE ALLSTATE CORPORATION

(Exact name of registrant as specified in its 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:

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

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

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

[ ] 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 July 30, 2014, the registrant issued a press release announcing its financial results for the second quarter of 2014, 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 July 30, 2014

 99.2                                            Second quarter 2014 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

FOR IMMEDIATE RELEASE

Allstate’s Strategy and Operating Performance Drive Strong Financial Results

NORTHBROOK, Ill., July 30, 2014 – The Allstate Corporation (NYSE: ALL) today reported financial results for the second quarter of 2014. The financial highlights were:

*             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 in the “Definitions of Non-GAAP Measures” section of this document.

“Allstate delivered strong results in the second quarter through continued focus on our five 2014 operating priorities,” said Thomas J. Wilson, chairman, president and chief executive officer of The Allstate Corporation. “Allstate Protection net written premiums increased by 5.5% and consolidated net income was $614 million for the quarter. Operating income was $1.01 per share, despite pre-tax catastrophe losses of $936 million. Policies in force grew in all three underwriting brands, led by increased momentum in the Allstate brand. Esurance’s substantial net written premium growth continued at 15.3% over the prior year quarter; but the rate of increase declined compared to prior quarters as we took actions to improve returns. The property-liability underlying combined ratio was 84.7 for the quarter, achieving our goal of maintaining profitability with first half results better than the full year outlook of 87 to 89. Proactively managing risk and returns of the investment portfolio generated good results as lower interest income was offset by excellent limited partnership returns.

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“We also made continued progress on creating shareholder value through strategic initiatives and capital management,” Wilson said. “Allstate’s telematics offering continues to grow rapidly and the customer value proposition is being expanded. The dispositions of Lincoln Benefit Life and Sterling Collision Centers were completed in the quarter. Shareholders were also provided strong cash returns with dividends and share repurchases, which totaled $1.37 billion for the first half of the year.”

Second Quarter 2014 Financial Results

·                  Allstate’s focus on growth produced positive results in the second quarter. Premium growth was driven by all three brands which underwrite insurance; Allstate brand premiums increased 5.0%, Encompass premiums improved 8.3% and Esurance premiums climbed 15.3%, compared to second quarter 2013. Allstate Financial premiums and contract charges of $518 million declined by 10.5% for the second quarter of 2014 from the year-earlier period due to the sale of Lincoln Benefit Life.

·                  Second quarter 2014 net income available to common shareholders was $614 million, or $1.39 per diluted common share, compared to $434 million, or $0.92 per diluted common share in the second quarter of 2013. The quarterly comparison was affected by a second quarter 2013 after-tax loss of $312 million on extinguishment of debt.

·                  Operating income was $445 million, or $1.01 per diluted common share in the second quarter of 2014, compared to $529 million, or $1.12 per diluted common share in the same period of 2013. The decrease in operating income was driven by catastrophe losses of $936 million, pre-tax, which were 44.7% higher than in the second quarter of 2013.

·                  The property-liability combined ratio was 97.4 for the second quarter of 2014, 1.3 points higher than the prior year quarter due to higher catastrophe losses. The underlying combined ratio of 84.7 for the second quarter was 2.2 points lower than in the same period of last year.

·                  Allstate Financial’s net income declined $45 million in the second quarter of 2014 to $145 million compared to the second quarter of 2013. An increase in operating income was more than offset by realized capital losses versus realized capital gains in the second quarter of 2013 and an increase to the loss on disposition of Lincoln Benefit Life. Operating income increased 5.1% to $165 million from the same quarter a year ago as strong improvement in investment and benefit spreads and a decrease in operating expenses more than offset the absence of earnings on the disposed Lincoln Benefit Life business.

·                  Total net investment income was $898 million in the second quarter of 2014, and included $195 million from limited partnership interests and $36 million related to prepayment fee income and litigation proceeds.

2014 Operating Priorities

Grow insurance policies in force. Allstate Protection insurance policies in force increased by 735,000, or 2.2% in the second quarter of 2014 versus the same period of last year.

·                  The Allstate brand, which serves consumers who prefer local advice from Allstate agencies and a wide range of products, grew insurance policies in force by 1.5% in the second quarter of 2014 compared to the prior year quarter. This growth was driven by a 450,000 policy increase in Allstate auto, 2.3% higher than the second quarter of 2013, and a 37,000 increase in other personal lines, 0.9% higher than the second quarter of 2013.  The rate of decline in homeowners continued to decelerate, as there were 28,000 fewer policies in force, or 0.5% less than the second quarter of 2013.

·                 Esurance, serving the self-directed consumer segment, grew insurance policies in force by 17.5%, or 213,000 policies in the second quarter of 2014 versus the second quarter of 2013. Esurance’s rate of policy growth has slowed from prior periods, reflecting the impact of profit improvement actions designed to improve the loss ratio.

·                  Encompass, which serves brand-neutral consumers who value local advice, grew insurance policies in force by 4.8%, or 59,000 policies, in the second quarter of 2014 compared with the same quarter of 2013.

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Maintain the underlying combined ratio. The property-liability underlying combined ratio of 84.7 in the second quarter of 2014 was 2.2 points better than in the prior year quarter. Underlying loss costs improved in the second quarter of 2014 after increasing due to severe weather in the first quarter of 2014.

·                  The Allstate brand combined ratio was 95.4 in the second quarter, with an underlying combined ratio of 83.0, 2.4 points lower than in the prior year quarter. Allstate brand auto had a second quarter 2014 combined ratio of 95.4 and an underlying combined ratio of 91.8, 2.3 points lower than in the prior year quarter. Allstate brand homeowners recorded a combined ratio of 98.6 and an underlying combined ratio of 60.2, 2.5 points lower than in the second quarter of 2013.

·                  Esurance recorded a second quarter 2014 combined ratio of 112.3 and an underlying combined ratio of 107.7, 5.2 points lower than prior year, reflecting the impact of ongoing profit improvement actions. The Esurance loss ratio was 75.4 for the second quarter of 2014, a 4.5 point decline from the same period of 2013. Esurance continues to adjust pricing and underwriting to ensure growth generates long-term profitability.

·                  In the Encompass brand, the second quarter combined ratio was 119.2, 16.8 points higher than the second quarter of 2013, due to higher catastrophe losses. The underlying combined ratio of 94.8 was 2.1 points higher than the second quarter of 2013. The Encompass team continues to implement pricing and underwriting changes to ensure it achieves desired returns.

Proactively manage our investments to generate attractive risk-adjusted returns. Net investment income was 8.7% lower in the second quarter of 2014 compared with the same period a year ago. Continued strong limited partnership returns were more than offset by the divestiture of $12 billion of investments associated with Lincoln Benefit Life and lower reinvestment yields in the Allstate Protection portfolio.

·                  The annualized portfolio yield in the second quarter of 2014 was 4.7%, an increase from the prior year quarter, as strong limited partnership results more than offset the lower contribution from the interest-bearing portfolio. Portfolio total return for the second quarter of 2014 was 2.2%, reflecting improved fixed income valuations and positive equity market performance.

·                  Limited partnership interests contributed income of $195 million in the second quarter, 54.8% higher than the prior year quarter, reflecting continued favorable valuations and strong cash distributions.

·                  Allstate’s consolidated investment portfolio totaled $82.6 billion at June 30, 2014 compared to $81.2 billion at December 31, 2013, which excluded Lincoln Benefit Life investments held for sale. The higher portfolio value reflected increased fixed income valuations due to a decrease in interest rates in 2014.

Operational priorities. Allstate continues to make progress on streamlining and modernizing its operating model to deliver improved customer service and build long-term growth platforms.

·                  Allstate agency capacity is growing, reflecting an increase in the number and size of agencies.

·                  Allstate Financial operating expenses are declining, as operations are downsized to reflect the Lincoln Benefit Life sale and ongoing operational simplification.

·                 Allstate is strategically investing in telematics and broadening the value proposition for the connected consumer.

·                  Esurance continues to expand its product suite, offering auto insurance in 43 states, renters insurance in 18 states, motorcycle insurance in nine states and homeowners insurance in seven states as of June 2014.

Strong Capital Position

“We continue to build Allstate’s financial strength and strategic flexibility,” said Steve Shebik, chief financial officer. “During the second quarter, Allstate repaid $300 million of 6.20% senior notes and issued $250 million of 6.25% noncumulative perpetual preferred stock. Book value per diluted common share reached $47.97 at June 30, 2014, an increase of 15.2% from a year ago. Our operating income return on equity was a strong 13.7% in the second quarter on a trailing twelve month basis, lower than the full year 2013 of 14.5%, reflecting higher catastrophes and higher equity resulting from pension benefit changes made last year.”

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During the second quarter, Allstate repurchased $142 million of common stock through open market purchases. The $2.5 billion share repurchase program announced in February is 40% complete as of June 30, 2014. Statutory surplus at June 30, 2014 was an estimated $18.0 billion for the combined insurance operating companies, an increase of $1.0 billion from June 30, 2013. Property-liability statutory surplus was an estimated $15.2 billion of this total, with Allstate Financial companies accounting for the remainder. During the second quarter, Allstate Life Insurance Company distributed $700 million in a return of capital to Allstate Insurance Company.

Visit www.allstateinvestors.com to view additional information about Allstate’s results, including a webcast of its quarterly conference call and the presentation discussed on the call. The conference call will be held at 9 a.m. ET on Thursday, July 31.

The Allstate Corporation (NYSE: ALL) is the nation’s largest publicly held personal lines insurer, protecting approximately 16 million households from life’s uncertainties through its Allstate, Encompass, Esurance and Answer Financial brand names and Allstate Financial business segment.  Allstate is widely known through the slogan “You’re In Good Hands With Allstate®.”  The Allstate brand’s network of small businesses offers auto, home, life and retirement products and services to customers in the United States and Canada.

Financial information, including material announcements about The Allstate Corporation, is routinely posted on www.allstateinvestors.com.

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THE ALLSTATE CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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THE ALLSTATE CORPORATION

BUSINESS 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 Measures

We believe that investors’ understanding of Allstate’s performance is enhanced by our disclosure of the following non-GAAP 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 available to common shareholders, 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,

·         valuation changes on embedded derivatives that are not hedged, after-tax,

·         amortization of deferred policy acquisition costs (DAC) and deferred sales inducements (DSI), to the extent they resulted from the recognition of certain realized capital gains and losses or valuation changes on embedded derivatives that are not hedged, after-tax,

·         amortization of purchased intangible assets, after-tax,

·         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 available to common shareholders 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, valuation changes on embedded derivatives that are not hedged, amortization of purchased intangible assets, gain (loss) on disposition of operations and adjustments for other significant non-recurring, infrequent or unusual items. Realized capital gains and losses, valuation changes on embedded derivatives that are not hedged 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. Amortization of purchased intangible assets is excluded because it relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. 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 available to common shareholders to assess our performance. We use adjusted measures of operating income and operating income per diluted common share in incentive compensation. Therefore, we believe it is useful for investors to evaluate net income available to common shareholders, 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 a substitute for net income available to common shareholders and does not reflect the overall profitability of our business.

The following table reconciles operating income and net income available to common shareholders.