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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): May 2, 2017
 
THE ALLSTATE CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
1-11840
 
36-3871531
(State or other
jurisdiction of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
2775 Sanders Road, Northbrook, Illinois
60062
(Address of principal executive offices)
(Zip Code)
 
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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
 
Emerging growth company
____

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ____





1


Section 2 – Financial Information
 
Item 2.02.                             Results of Operations and Financial Condition.
 
The Registrant’s press release dated May 2, 2017, announcing its financial results for the first quarter of 2017, and the Registrant’s first quarter 2017 investor supplement are furnished as Exhibits 99.1 and 99.2, respectively, 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 May 2, 2017
99.2                                                First quarter 2017 Investor Supplement of The Allstate Corporation

































2


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.
 
 
 
THE ALLSTATE CORPORATION
 
(Registrant)
 
 
 
 
By:
/s/ Samuel H. Pilch
 
Name: Samuel H. Pilch
 
Title: Senior Group Vice President and Controller
 
 
Date: May 2, 2017
 


3
Exhibit

Exhibit 99.1

https://cdn.kscope.io/bb27873e3cc18b722c119ca2971d28a7-earningsreleaseimagea07.jpg
FOR IMMEDIATE RELEASE

Contacts:    
Greg Burns                John Griek
Media Relations          Investor Relations
(847) 402-5600                (847) 402-2800

Allstate Starts 2017 With Strong Profitability
Broad Business Model Moderates Impact of Severe Weather

NORTHBROOK, Ill., May 2, 2017 – The Allstate Corporation (NYSE: ALL) today reported financial results for the first quarter of 2017.
The Allstate Corporation Consolidated Highlights
 
Three months ended
March 31,
($ in millions, except per share data and ratios)
2017
2016
% / pts
Change
Consolidated revenues
$
9,434

$
8,871

6.3

Net income applicable to common shareholders
666

217

206.9

per diluted common share
1.79

0.57

214.0

Operating income*
608

322

88.8

per diluted common share*
1.64

0.84

95.2

Return on common shareholders’ equity
 
 
 
Net income applicable to common shareholders
11.6
%
8.3
%
3.3 pts

Operating income*
11.9
%
10.2
%
1.7 pts

Book value per common share
52.41

48.89

7.2

Property-Liability combined ratio
 
 
 
Recorded
93.6

98.4

(4.8) pts

Underlying combined ratio* (excludes catastrophes, prior year reserve reestimates and amortization of purchased intangibles)
84.8

87.2

(2.4) pts

Catastrophe losses
781

827

(5.6
)
*
Measures used in this release that are not based on accounting principles generally accepted in the United States of America (“non-GAAP”) are denoted with an asterisk and defined and reconciled to the most directly comparable GAAP measure in the “Definitions of Non-GAAP Measures” section of this document.

"We are off to a strong start in 2017 on both operating priorities and strategic initiatives. The value of providing customers a broad range of protection products across North America was evident as significant catastrophe losses from large hail storms were offset by favorable winter weather that reduced the number of auto accidents. Overall net income was $666 million, $1.79 per share, for the first quarter, a significant increase compared to last year,” said Tom Wilson, chairman and chief executive officer of The Allstate Corporation. “We made excellent progress on our operating priorities of better serving customers, achieving economic returns on capital and proactively managing investments. First quarter results for the investment portfolio were solid as investment income increased to $748 million and total return was 1.6%. Allstate Financial generated $110 million of operating income due to higher investment results.

“We also made progress on increasing the customer base and building long-term growth platforms. The acquisition of SquareTrade closed in January, expanding our product offerings and distribution and increasing policies in force to over 73 million. The number of auto insurance policies, however, declined for the Allstate, Esurance and Encompass brands, reflecting the continued impact of auto insurance profit improvement plans put in place in 2015. Allstate Benefits continued its 17-year record of growth with policies increasing by 7% to 4 million. We also continue to invest in a number of innovative protection services such as Arity and Allstate Roadside. Overall we made

1

progress on achieving our purpose of serving customers, shareholders and communities, which enhances our reputation and strengthens our business. See How Corporations Can Be A Force For Good,” concluded Wilson.

Operating Results: First Quarter 2017

•
Total revenue of $9.4 billion in the first quarter of 2017 increased by 6.3% compared to the prior year quarter.
◦
Property-liability insurance premiums increased 3.1%
◦
Allstate Financial premiums and contract charges rose 4.8%
◦
Net investment income increased 2.3%
◦
Realized capital gains were $134 million, compared to losses of $149 million in the prior year quarter

•
Net income applicable to common shareholders was $666 million, or $1.79 per diluted share, in the first quarter of 2017, compared to $217 million, or $0.57 per diluted share, in the first quarter of 2016. Operating income* was $608 million in the first quarter of 2017, compared to $322 million in the first quarter of 2016.

•
Property-liability net income of $652 million was $430 million higher than the first quarter of 2016. Underwriting income of $507 million was $382 million above the prior year quarter, driven by a lower loss ratio, which was a result of increased average premiums, improved loss trends, favorable prior year reserve releases and lower catastrophe losses.
◦
The underlying combined ratio* of 84.8 for the first quarter of 2017 was 2.4 points lower than the first quarter of 2016, reflecting improvement in the auto underlying loss ratio across all three underwritten brands. This was partially offset by an increased Allstate brand auto expense ratio, driven by investments in growth, and a higher Allstate brand homeowners underlying combined ratio compared to a very favorable first quarter of 2016. Homeowners underlying margins remain in our targeted range of performance. The annual outlook range for the underlying combined ratio is 87-89(1).

Property-Liability Results
 
Three months ended
March 31,
(% to earned premiums)
2017
2016
pts
Change
Recorded Combined Ratio
93.6

98.4

(4.8
)
Allstate Brand Auto
90.6

99.0

(8.4
)
Allstate Brand Homeowners
93.7

93.4

0.3

Allstate Brand Other Personal Lines
93.1

92.6

0.5

Esurance
102.4

106.2

(3.8
)
Encompass
111.7

105.8

5.9

SquareTrade
159.3

—

NM

Underlying Combined Ratio*
84.8

87.2

(2.4
)
Allstate Brand Auto
90.9

95.9

(5.0
)
Allstate Brand Homeowners
61.3

59.4

1.9

Allstate Brand Other Personal Lines
78.8

78.1

0.7

Esurance
100.2

105.0

(4.8
)
Encompass
86.6

88.3

(1.7
)
NM = not meaningful

◦
Allstate brand auto net written premium grew 2.9% in the first quarter of 2017, reflecting a 6.1% increase in average premium compared to the prior year quarter, which was partially offset by a 2.9% decline in policies in force. Actions taken to improve auto insurance margins continue to impact average premium and policy in force trends. As margins improve we are investing in expanding our distribution capacity and marketing. The recorded combined ratio of 90.6 in the first quarter of 2017 was 8.4 points better than the prior year quarter and was favorably impacted by increased average earned premium, lower frequency, 1.8 points of favorable prior year reserve reestimates and lower catastrophe losses. The underlying combined ratio* in the first quarter of 2017 was 5.0 points better than the first quarter of 2016,
__________
(1) A reconciliation of this non-GAAP measure to the combined ratio, a GAAP measure, is not possible on a forward-looking basis because it is not possible to provide a reliable forecast of catastrophes, and prior year reserve reestimates are expected to be zero because reserves are determined based on our best estimate of ultimate loss reserves as of the reporting date.

2

driven by moderate winter weather in January and February. Quarterly profitability results are subject to fluctuations due to items such as weather patterns, reserve reestimates and expense timing.

◦
Allstate brand homeowners net written premium increased slightly in the first quarter of 2017 compared to the first quarter of 2016, as increased average premium and lower reinsurance costs were offset by a 1.4% decline in policies in force. Homeowner policy growth has been adversely impacted by actions taken to improve auto margins. The recorded combined ratio of 93.7 in the first quarter of 2017 increased 0.3 points compared to the prior year quarter due to a higher expense ratio. The underlying combined ratio* of 61.3 in the first quarter of 2017 continued to reflect strong underlying profitability.

◦
Allstate brand other personal lines net written premium increased 4.2% in the first quarter of 2017 compared to the first quarter 2016, to $368 million. The recorded combined ratio was 93.1 in the first quarter of 2017, an increase of 0.5 points compared to the prior year quarter due to higher expenses and unfavorable prior year reserve development. The underlying combined ratio* was 78.8 in the first quarter of 2017.

◦
Esurance net written premium growth of 1.1% compared to the prior year quarter reflects increased auto average premium. Policy growth was flat in the first quarter of 2017 compared to the first quarter of 2016, as growth in homeowners offset the decline in auto policies. The recorded combined ratio of 102.4 was 3.8 points better in the first quarter of 2017 compared to the first quarter 2016, as a lower expense ratio was only partially offset by a higher loss ratio. The auto loss ratio of 74.4 in the first quarter was 1.0 point higher than the prior year quarter, driven by elevated catastrophe losses and less favorable prior year reserve development. The homeowners loss ratio in the first quarter was 92.9, while the combined ratio of 150.0 includes start-up costs.

◦
Encompass net written premium declined by 10.3% and policies in force were 14.5% lower in the first quarter of 2017 compared to the prior year quarter. Profit improvement actions continue to be implemented in states with inadequate returns, while we implement growth plans in states achieving target margins. As part of our profit actions, in the first quarter Encompass announced the intent to withdraw from Massachusetts starting in late June. The recorded combined ratio of 111.7 in the first quarter of 2017 was above the first quarter of 2016 due to higher catastrophe losses, while the underlying combined ratio* of 86.6 improved compared to the same period a year ago.

◦
SquareTrade net written premium was $81 million and policies in force were 30 million in the first quarter of 2017. The recorded combined ratio was 159.3 and included $23 million of amortization of purchased intangible assets related to the acquisition and is also impacted by investments in growth. The loss ratio in the first quarter was 61.0.

•
Allstate Financial net income was $108 million and operating income was $110 million in the first quarter of 2017. Operating income was $6 million higher than the prior year quarter, largely due to higher investment results in Allstate Annuities.

Allstate Financial Results
 
Three months ended
March 31,
($ in millions)
2017
2016
%
Change
Net Income
$
108

$
68

58.8

Allstate Life
57

57

—

Allstate Benefits
22

20

10.0

Allstate Annuities
29

(9
)
NM

Operating Income
$
110

$
104

5.8

Allstate Life
59

66

(10.6
)
Allstate Benefits
22

23

(4.3
)
Allstate Annuities
29

15

93.3



3

◦
Allstate Life net income was $57 million and operating income was $59 million in the first quarter of 2017. Operating income was $7 million lower than the prior year quarter primarily driven by higher mortality experience and operating expenses.

◦
Allstate Benefits net income and operating income were both $22 million in the first quarter of 2017. Operating income was $1 million lower than the prior year quarter, as increased benefit spread was offset by higher expenses, including guaranty fund assessments.

◦
Allstate Annuities net income and operating income were both $29 million in the first quarter of 2017. Operating income was $14 million higher than the prior year quarter, primarily driven by higher investment spread. We continue to increase performance-based investments to better match the long-term nature of our annuity liabilities.

•
Allstate Investments generated net investment income of $748 million, which was 2.3% or $17 million above the prior year quarter. This increase reflects higher income in both the market and performance-based portfolios.

Allstate Investment Results
 
Three months ended
March 31,
($ in millions, except ratios)
2017
2016
% / pts
Change
Net investment income
$
748

$
731

2.3

Realized capital gains and losses
134

(149
)
NM

Change in unrealized net capital gains, pre-tax
331

963

(65.6
)
Total return on investment portfolio
1.6
%
2.0
%
(0.4
)

◦
Carrying value of $81.1 billion at March 31, 2017 declined $656 million compared to the prior year end, as funds used to close the SquareTrade acquisition more than offset market appreciation and operating cash flows.

◦
Net realized capital gains were $134 million in the first quarter of 2017, compared to losses of $149 million in the prior year quarter. Net realized gains on sales of $208 million were partially offset by impairment and change in intent write-downs of $59 million and derivative losses of $15 million.

◦
Total return on the investment portfolio was 1.6% for the first quarter of 2017, which included a stable contribution from net investment income and increased fixed income and equity valuations. The trailing four quarter total return was 4.0%.

Proactive Capital Management
“Allstate returned $371 million of capital to our shareholders during the first quarter through a combination of $122 million in common stock dividends and repurchasing $249 million of outstanding shares,” said Steve Shebik, chief financial officer. “As of March 31, 2017, there was $442 million remaining on the $1.5 billion common share repurchase program. Our operating income return on common shareholders’ equity* of 11.9% for the 12 months ended March 31, 2017, was an increase of 1.7 points compared to the prior year time period. Book value per diluted common share of $52.41 was 7.2% higher than March 31, 2016”, concluded Shebik.


Visit www.allstateinvestors.com to view additional information about Allstate’s results, including a webcast of its quarterly conference call and the call presentation. The conference call will be held at 9 a.m. ET on Wednesday, May 3.

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 auto, home, life and other insurance offered through its Allstate, Esurance, Encompass and Answer Financial brand names. Allstate is widely known through the slogan “You’re In Good Hands With Allstate®.” Allstate agencies are in virtually every local community in America.

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




4

Forward-Looking Statements
This news release contains “forward-looking statements” that anticipate results based on our estimates, assumptions and plans that are subject to uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like “plans,” “seeks,” “expects,” “will,” “should,” “anticipates,” “estimates,” “intends,” “believes,” “likely,” “targets” and other words with similar meanings. We believe these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those communicated in these forward-looking statements. Factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements may be found in our filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” section in our most recent annual report on Form 10-K. Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statement.

5

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
($ in millions, except per share data)
Three months ended
March 31,
 
2017
 
2016
 
(unaudited)
Revenues
 
 
 
Property-liability insurance premiums
$
7,959

 
$
7,723

Life and annuity premiums and contract charges
593

 
566

Net investment income
748

 
731

Realized capital gains and losses:
 
 
 
Total other-than-temporary impairment (“OTTI”) losses
(62
)
 
(91
)
OTTI losses reclassified to (from) other comprehensive income
3

 
10

Net OTTI losses recognized in earnings
(59
)
 
(81
)
Sales and other realized capital gains and losses
193

 
(68
)
Total realized capital gains and losses
134

 
(149
)
 
9,434

 
8,871

 
 
 
 
Costs and expenses
 
 
 
Property-liability insurance claims and claims expense
5,416

 
5,684

Life and annuity contract benefits
474

 
455

Interest credited to contractholder funds
173

 
190

Amortization of deferred policy acquisition costs
1,169

 
1,129

Operating costs and expenses
1,097

 
982

Restructuring and related charges
10

 
5

Interest expense
85

 
73

 
8,424

 
8,518

 
 
 
 
Gain on disposition of operations
2

 
2

 
 
 
 
Income from operations before income tax expense
1,012

 
355

 
 
 
 
Income tax expense
317

 
109

 
 
 
 
Net income
695

 
246

 
 
 
 
Preferred stock dividends
29

 
29

 
 
 
 
Net income applicable to common shareholders
$
666

 
$
217

 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
Net income applicable to common shareholders per common share – Basic
$
1.82

 
$
0.57

 
 
 
 
Weighted average common shares – Basic
365.7

 
378.1

 
 
 
 
Net income applicable to common shareholders per common share – Diluted
$
1.79

 
$
0.57

 
 
 
 
Weighted average common shares – Diluted
371.3

 
382.9

 
 
 
 
Cash dividends declared per common share
$
0.37

 
$
0.33








6

THE ALLSTATE CORPORATION
BUSINESS RESULTS
($ in millions, except ratios)
Three months ended
 
March 31,
 
2017
 
2016
Property-Liability
 
 
 
Premiums written
$
7,723

 
$
7,515

Premiums earned
$
7,959

 
$
7,723

Claims and claims expense
(5,416
)
 
(5,684
)
Amortization of deferred policy acquisition costs
(1,090
)
 
(1,056
)
Operating costs and expenses
(936
)
 
(853
)
Restructuring and related charges 
(10
)
 
(5
)
Underwriting income
507

 
125

Net investment income
311

 
302

Income tax expense on operations
(255
)
 
(141
)
Realized capital gains and losses, after-tax
89

 
(64
)
Net income applicable to common shareholders
$
652

 
$
222

Catastrophe losses
$
781

 
$
827

Amortization of purchased intangible assets
$
25

 
$
9

Operating ratios:
 
 
 
Claims and claims expense ratio
68.0

 
73.6

Expense ratio
25.6

 
24.8

Combined ratio 
93.6

 
98.4

Effect of catastrophe losses on combined ratio
9.8

 
10.7

Effect of prior year reserve reestimates on combined ratio
(1.2
)
 
0.3

Effect of catastrophe losses included in prior year reserve reestimates on combined ratio
0.1

 
(0.1
)
Effect of amortization of purchased intangible assets on combined ratio
0.3

 
0.1

Effect of Discontinued Lines and Coverages on combined ratio
—

 
—

 
 
 
 
Allstate Financial
 
 
 
Premiums and contract charges
$
593

 
$
566

Net investment income
426

 
419

Contract benefits
(474
)
 
(455
)
Interest credited to contractholder funds
(173
)
 
(184
)
Amortization of deferred policy acquisition costs
(75
)
 
(71
)
Operating costs and expenses
(135
)
 
(123
)
Income tax expense on operations
(52
)
 
(48
)
Operating income
110

 
104

Realized capital gains and losses, after-tax
(1
)
 
(32
)
Valuation changes on embedded derivatives that are not hedged, after-tax
—

 
(4
)
DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax
(3
)
 
(1
)
Gain on disposition of operations, after-tax
2

 
1

Net income applicable to common shareholders
$
108

 
$
68

 
 
 
 
Corporate and Other
 
 
 
Net investment income
$
11

 
$
10

Operating costs and expenses
(93
)
 
(79
)
Income tax benefit on operations
30

 
25

Preferred stock dividends
(29
)
 
(29
)
Operating loss
(81
)
 
(73
)
Business combination expenses, after-tax
(13
)
 
—

Net loss applicable to common shareholders
$
(94
)
 
$
(73
)
 
 
 
 
Consolidated net income applicable to common shareholders
$
666

 
$
217




7

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
 
 
 
 
($ in millions, except par value data)

March 31, 2017
 
December 31, 2016
Assets
(unaudited)
 
 
Investments:
 
 
 
Fixed income securities, at fair value (amortized cost $57,194 and $56,576)
$
58,636

 
$
57,839

Equity securities, at fair value (cost $5,026 and $5,157)
5,685

 
5,666

Mortgage loans
4,349

 
4,486

Limited partnership interests
5,982

 
5,814

Short-term, at fair value (amortized cost $2,753 and $4,288)
2,753

 
4,288

Other
3,738

 
3,706

Total investments
81,143

 
81,799

Cash
442

 
436

Premium installment receivables, net
5,649

 
5,597

Deferred policy acquisition costs
3,988

 
3,954

Reinsurance recoverables, net
8,723

 
8,745

Accrued investment income
577

 
567

Property and equipment, net
1,067

 
1,065

Goodwill
2,295

 
1,219

Other assets
2,923

 
1,835

Separate Accounts
3,436

 
3,393

Total assets
$
110,243

 
$
108,610

Liabilities
 
 
 
Reserve for property-liability insurance claims and claims expense
$
25,628

 
$
25,250

Reserve for life-contingent contract benefits
12,223

 
12,239

Contractholder funds
20,051

 
20,260

Unearned premiums
12,705

 
12,583

Claim payments outstanding
845

 
879

Deferred income taxes
833

 
487

Other liabilities and accrued expenses
7,018

 
6,599

Long-term debt
6,346

 
6,347

Separate Accounts
3,436

 
3,393

Total liabilities
89,085

 
88,037

Shareholders’ equity
 
 
 
Preferred stock and additional capital paid-in, $1 par value, 72.2 thousand shares issued and outstanding, $1,805 aggregate liquidation preference
1,746

 
1,746

Common stock, $.01 par value, 900 million issued, 365 million and 366 million shares outstanding
9

 
9

Additional capital paid-in
3,285

 
3,303

Retained income
41,208

 
40,678

Deferred ESOP expense
(6
)
 
(6
)
Treasury stock, at cost (535 million and 534 million shares)
(24,887
)
 
(24,741
)
Accumulated other comprehensive income:
 
 
 
Unrealized net capital gains and losses:
 
 
 
Unrealized net capital gains and losses on fixed income securities with OTTI
59

 
57

Other unrealized net capital gains and losses
1,304

 
1,091

Unrealized adjustment to DAC, DSI and insurance reserves
(107
)
 
(95
)
Total unrealized net capital gains and losses
1,256

 
1,053

Unrealized foreign currency translation adjustments
(53
)
 
(50
)
Unrecognized pension and other postretirement benefit cost
(1,400
)
 
(1,419
)
Total accumulated other comprehensive loss
(197
)
 
(416
)
Total shareholders’ equity
21,158

 
20,573

Total liabilities and shareholders’ equity
$
110,243

 
$
108,610


8

THE ALLSTATE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in millions)
Three months ended
March 31,
 
2017
 
2016
Cash flows from operating activities
(unaudited)
Net income
$
695

 
$
246

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation, amortization and other non-cash items
119

 
91

Realized capital gains and losses
(134
)
 
149

Gain on disposition of operations
(2
)
 
(2
)
Interest credited to contractholder funds
173

 
190

Changes in:
 
 
 
Policy benefits and other insurance reserves
183

 
459

Unearned premiums
(248
)
 
(205
)
Deferred policy acquisition costs
14

 
(7
)
Premium installment receivables, net
(19
)
 
11

Reinsurance recoverables, net
11

 
(40
)
Income taxes
284

 
(26
)
Other operating assets and liabilities
(219
)
 
(152
)
Net cash provided by operating activities
857

 
714

Cash flows from investing activities
 
 
 
Proceeds from sales
 
 
 
Fixed income securities
7,083

 
6,216

Equity securities
2,601

 
1,664

Limited partnership interests
210

 
180

Other investments
24

 
94

Investment collections
 
 
 
Fixed income securities
1,029

 
949

Mortgage loans
223

 
79

Other investments
174

 
43

Investment purchases
 

 
 
Fixed income securities
(8,800
)
 
(5,401
)
Equity securities
(2,383
)
 
(1,733
)
Limited partnership interests
(268
)
 
(270
)
Mortgage loans
(86
)
 
(44
)
Other investments
(219
)
 
(253
)
Change in short-term investments, net
1,572

 
(1,357
)
Change in other investments, net
(10
)
 
(19
)
Purchases of property and equipment, net
(74
)
 
(52
)
Acquisition of operations
(1,356
)
 
—

Net cash (used in) provided by investing activities
(280
)
 
96

Cash flows from financing activities
 
 
 
Repayments of long-term debt
—

 
(16
)
Contractholder fund deposits
257

 
261

Contractholder fund withdrawals
(483
)
 
(492
)
Dividends paid on common stock
(122
)
 
(115
)
Dividends paid on preferred stock
(29
)
 
(29
)
Treasury stock purchases
(264
)
 
(456
)
Shares reissued under equity incentive plans, net
67

 
30

Excess tax benefits on share-based payment arrangements
—

 
12

Other
3

 
31

Net cash used in financing activities
(571
)
 
(774
)
Net increase in cash
6

 
36

Cash at beginning of period
436

 
495

Cash at end of period
$
442

 
$
531



9

The following table presents the investment portfolio by strategy as of March 31, 2017.
($ in millions)
Total
 
Market-Based
 
Performance-Based
Fixed income securities
$
58,636

 
$
58,568

 
$
68

Equity securities
5,685

 
5,578

 
107

Mortgage loans
4,349

 
4,349

 
—

Limited partnership interests
5,982

 
518

 
5,464

Short-term investments
2,753

 
2,753

 
—

Other
3,738

 
3,203

 
535

Total
$
81,143

 
$
74,969

 
$
6,174

 
 
 
 
 
 
Property-Liability
$
42,000

 
$
38,721

 
$
3,279

Allstate Financial
36,610

 
33,715

 
2,895

Corporate & Other
2,533

 
2,533

 
—

Total
$
81,143

 
$
74,969

 
$
6,174


The following table presents investment income by investment strategy for the three months ended March 31.
 
Three months ended
March 31,
($ in millions)
2017
 
2016
Market-Based:


 


Property-Liability
$
272

 
$
260

Allstate Financial
374

 
370

Corporate & Other
13

 
12

Total Market-Based
659

 
642

 
 
 
 
Performance-Based:
 
 
 
Property-Liability
67

 
66

Allstate Financial
73

 
67

Corporate & Other
—

 
—

Total Performance-Based
140

 
133

 
 
 
 
Investment income, before expense
799

 
775

Investment expense
(51
)
 
(44
)
Net investment income
$
748

 
$
731




10

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 applicable 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,
•
business combination expenses and the 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 applicable 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, business combination expenses and the 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. Business combination expenses are excluded because they are non-recurring in nature and the 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 applicable to common shareholders to assess our performance. We use adjusted measures of operating income in incentive compensation. Therefore, we believe it is useful for investors to evaluate net income applicable 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 applicable to common shareholders and does not reflect the overall profitability of our business.
The following tables reconcile net income applicable to common shareholders and operating income. Taxes on adjustments to reconcile net income applicable to common shareholders and operating income generally use a 35% effective tax rate and are reported net with the reconciling adjustment. If the effective tax rate is other than 35%, this is specified in the disclosure.
($ in millions, except per share data)
For the three months ended March 31,
 
Property-Liability
 
Allstate Financial
 
Consolidated
 
Per diluted common share
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Net income applicable to common shareholders
$
652

 
$
222

 
$
108

 
$
68

 
$
666

 
$
217

 
$
1.79

 
$
0.57

Realized capital gains and losses, after-tax
(89
)
 
64

 
1

 
32

 
(88
)
 
96

 
(0.24
)
 
0.25

Valuation changes on embedded derivatives that are not hedged, after-tax
—

 
—

 
—

 
4

 
—

 
4

 
—

 
0.01

DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax
—

 
—

 
3

 
1

 
3

 
1

 
0.01

 
—

Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax
—

 
(1
)
 
—

 
—

 
—

 
(1
)
 
—

 
—

Business combination expenses and the amortization of purchased intangible assets, after-tax
16

 
6

 
—

 
—

 
29

 
6

 
0.08

 
0.01

Gain on disposition of operations, after-tax
—

 
—

 
(2
)
 
(1
)
 
(2
)
 
(1
)
 
—

 
—

Operating income*
$
579

 
$
291

 
$
110

 
$
104

 
$
608

 
$
322

 
$
1.64

 
$
0.84

Operating income return on common shareholders’ equity is a ratio that uses a non-GAAP measure. It is calculated by dividing the rolling 12-month operating income by the average of common shareholders’ equity at the beginning and at the end of the 12-months, after excluding the effect of unrealized net capital gains and losses. Return on common shareholders’ equity is the most directly comparable GAAP measure. We use operating income as the numerator for the same reasons we use operating income, as discussed above. We use average common shareholders’ equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of common

11

shareholders’ equity primarily attributable to the company’s earned and realized business operations because it eliminates the effect of items that are unrealized and vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process. We use it to supplement our evaluation of net income applicable to common shareholders and return on common shareholders’ equity because it excludes the effect of items that tend to be highly variable from period to period. We believe that this measure is useful to investors and that it provides a valuable tool for investors when considered along with return on common shareholders’ equity because it eliminates the after-tax effects of realized and unrealized net capital gains and losses that can fluctuate significantly from period to period and that are driven by economic developments, the magnitude and timing of which are generally not influenced by management. In addition, it eliminates non-recurring items that are not indicative of our ongoing business or economic trends. A byproduct of excluding the items noted above to determine operating income return on common shareholders’ equity from return on common shareholders’ equity is the transparency and understanding of their significance to return on common shareholders’ equity variability and profitability while recognizing these or similar items may recur in subsequent periods. We use adjusted measures of operating income return on common shareholders’ equity in incentive compensation. Therefore, we believe it is useful for investors to have operating income return on common shareholders’ equity and return on common shareholders’ equity when evaluating our performance. We note that investors, financial analysts, financial and business media organizations and rating agencies utilize operating income return on common shareholders’ equity 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 utilization of capital. Operating income return on common shareholders’ equity should not be considered a substitute for return on common shareholders’ equity and does not reflect the overall profitability of our business.
The following tables reconcile return on common shareholders’ equity and operating income return on common shareholders’ equity.
($ in millions)
For the twelve months ended
March 31,
 
2017
 
2016
Return on common shareholders’ equity
 
 
 
Numerator:
 
 
 
Net income applicable to common shareholders
$
2,210

 
$
1,624

Denominator:
 
 
 
Beginning common shareholders’ equity (1)
$
18,594

 
$
20,433

Ending common shareholders’ equity (1)
19,412

 
18,594

Average common shareholders’ equity
$
19,003

 
$
19,514

Return on common shareholders’ equity
11.6
%
 
8.3
%
($ in millions)
For the twelve months ended
March 31,
 
2017
 
2016
Operating income return on common shareholders’ equity
 
 
 
Numerator:
 
 
 
Operating income
$
2,124

 
$
1,819

 
 
 
 
Denominator:
 
 
 
Beginning common shareholders’ equity
$
18,594

 
$
20,433

Unrealized net capital gains and losses
1,200

 
2,137

Adjusted beginning common shareholders’ equity
17,394

 
18,296

 
 
 
 
Ending common shareholders’ equity
19,412

 
18,594

Unrealized net capital gains and losses
1,256

 
1,200

Adjusted ending common shareholders’ equity
18,156

 
17,394

Average adjusted common shareholders’ equity
$
17,775

 
$
17,845

Operating income return on common shareholders’ equity*
11.9
%
 
10.2
%
_____________
(1) Excludes equity related to preferred stock of $1,746 million.
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates and amortization of purchased intangible assets (“underlying combined ratio”) is a non-GAAP ratio, which is computed as the difference between four GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio, the effect of prior year non-catastrophe reserve reestimates on the combined ratio, and the effect of amortization of purchased intangible assets on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses, prior year reserve reestimates and amortization of purchased intangible assets. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves. Amortization of purchased intangible assets relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. We also provide it to facilitate a comparison to our outlook on the underlying combined ratio. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business.

12

The following tables reconcile the respective combined ratio to the underlying combined ratio.
Property-Liability
Three months ended
March 31,
 
2017
 
2016
Combined ratio
93.6

 
98.4

Effect of catastrophe losses
(9.8
)
 
(10.7
)
Effect of prior year non-catastrophe reserve reestimates
1.3

 
(0.4
)
Effect of amortization of purchased intangible assets
(0.3
)
 
(0.1
)
Combined ratio excluding the effect of catastrophes, prior year reserve reestimates and amortization of purchased intangible assets (“underlying combined ratio”)*
84.8

 
87.2

 
 
 
 
Effect of prior year catastrophe reserve reestimates
0.1

 
(0.1
)
Underwriting margin is calculated as 100% minus the combined ratio.
Allstate Brand - Total
Three months ended
March 31,
 
2017
 
2016
Combined ratio
91.8

 
97.6

Effect of catastrophe losses
(9.8
)
 
(11.2
)
Effect of prior year non-catastrophe reserve reestimates
1.5

 
(0.3
)
Underlying combined ratio*
83.5

 
86.1

 
 
 
 
Effect of prior year catastrophe reserve reestimates
—

 
(0.1
)
Allstate Brand - Auto Insurance
Three months ended
March 31,
 
2017
 
2016
Combined ratio
90.6

 
99.0

Effect of catastrophe losses
(1.3
)
 
(2.9
)
Effect of prior year non-catastrophe reserve reestimates
1.6

 
(0.2
)
Underlying combined ratio*
90.9

 
95.9

 
 
 
 
Effect of prior year catastrophe reserve reestimates
(0.2
)
 
(0.1
)
Allstate Brand - Homeowners Insurance
Three months ended
March 31,
 
2017
 
2016
Combined ratio
93.7

 
93.4

Effect of catastrophe losses
(34.1
)
 
(34.2
)
Effect of prior year non-catastrophe reserve reestimates
1.7

 
0.2

Underlying combined ratio*
61.3

 
59.4

 
 
 
 
Effect of prior year catastrophe reserve reestimates
0.1

 
(0.3
)
Allstate Brand - Other Personal Lines
Three months ended
March 31,
 
2017
 
2016
Combined ratio
93.1

 
92.6

Effect of catastrophe losses
(14.6
)
 
(16.0
)
Effect of prior year non-catastrophe reserve reestimates
0.3

 
1.5

Underlying combined ratio*
78.8

 
78.1

 
 
 
 
Effect of prior year catastrophe reserve reestimates
1.8

 
—

Encompass Brand - Total
Three months ended
March 31,
 
2017
 
2016
Combined ratio
111.7

 
105.8

Effect of catastrophe losses
(23.7
)
 
(13.3
)
Effect of prior year non-catastrophe reserve reestimates
(1.4
)
 
(4.2
)
Underlying combined ratio*
86.6

 
88.3

 
 
 
 
Effect of prior year catastrophe reserve reestimates
0.7

 
0.3


13

 
 
 
 
 
 
 
 
Underlying loss ratio is a non-GAAP ratio, which is computed as the difference between three GAAP operating ratios: the loss ratio, the effect of catastrophes on the combined ratio and the effect of prior year non-catastrophe reserve reestimates on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends that may be obscured by catastrophe losses and prior year reserve reestimates. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. The most directly comparable GAAP measure is the loss ratio. The underlying loss ratio should not be considered a substitute for the loss ratio and does not reflect the overall loss ratio of our business.
The following table reconciles the Esurance brand combined ratio to the Esurance brand underlying loss ratio and underlying combined ratio.
Esurance Brand - Total
Three months ended
March 31,
 
2017
 
2016
Combined ratio
102.4

 
106.2

Effect of catastrophe losses
(1.9
)
 
(0.7
)
Effect of prior year non-catastrophe reserve reestimates
—

 
1.0

Effect of amortization of purchased intangible assets
(0.3
)
 
(1.5
)
Underlying combined ratio*
100.2

 
105.0

Expense ratio, excluding the effect of amortization of purchased intangible assets
(27.2
)
 
(31.9
)
Underlying loss ratio*
73.0

 
73.1


# # # # #

14
allcorp33117investorsupp
Exhibit 99.2 Measures used in these financial statements and exhibits that are not based on generally accepted accounting principles ("non-GAAP") are denoted with an asterisk (*). These measures are defined on the page "Definitions of Non-GAAP Measures" and are reconciled to the most directly comparable generally accepted accounting principles ("GAAP") measure herein. THE ALLSTATE CORPORATION Investor Supplement First Quarter 2017 The consolidated financial statements and financial exhibits included herein are unaudited. These consolidated financial statements and exhibits should be read in conjunction with the consolidated financial statements and notes thereto included in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The results of operations for interim periods should not be considered indicative of results to be expected for the full year.

 
PAGE Consolidated Statements of Operations 1 Contribution to Income 2 Revenues 3 Statements of Financial Position 4 Book Value Per Common Share 5 Return on Common Shareholders' Equity 6 Debt to Capital 7 Statements of Cash Flows 8 Analysis of Deferred Policy Acquisition Costs 9 Property-Liability Operations Property-Liability Results 10 Property-Liability Underwriting Results by Area of Business 11 Property-Liability Premiums Written by Brand 12 Impact of Net Rate Changes Approved on Premiums Written 13 Property-Liability Policies in Force and Other Statistics 14 Allstate Brand Profitability Measures 15 Allstate Brand Statistics 16 Allstate Brand Auto Claim Frequency Analysis 17,18 Esurance Brand Profitability Measures and Statistics 19 Encompass Brand Profitability Measures and Statistics 20 SquareTrade Profitabillity Measures 21 Auto Profitability Measures 22 Homeowners Profitability Measures 23 Other Personal Lines Profitability Measures 24 Auto, Homeowners and Other Personal Lines Underlying Combined Ratios 25 Commercial Lines Profitability Measures 26 Other Business Lines Profitability Measures 27 Allstate Brand Auto and Homeowners Underlying Loss and Expense 28 Homeowners Supplemental Information 29 Catastrophe Losses by Brand 30 Catastrophe Experience 31 Prior Year Reserve Reestimates 32 Asbestos and Environmental Reserves 33 Allstate Financial Operations Allstate Financial Segment Results 34 Return on Attributed Equity 35 Allstate Financial Premiums and Contract Charges 36 Allstate Financial Change in Contractholder Funds 37 Allstate Financial Analysis of Net Income 38 Allstate Financial Weighted Average Investment Spreads 39 Allstate Financial Supplemental Product Information 40 Allstate Financial Insurance Policies and Annuities in Force 41 Allstate Life, Allstate Annuities and Allstate Benefits Results and Product Information 42 Corporate and Other Segment Results 43 Investments Investments 44 Unrealized Net Capital Gains and Losses on Security Portfolio by Type 45 Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax) 46 Property-Liability Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax) 47 Allstate Financial Net Investment Income, Yields and Realized Capital Gains and Losses (Pre-tax) 48 Consolidated Investment Position and Results by Strategy 49 Property-Liability Consolidated Investment Position and Results by Strategy 50 Allstate Financial Consolidated Investment Position and Results by Strategy 51 Performance-Based Investments 52 Limited Partnership Interests 53 Definitions of Non-GAAP Measures 54 THE ALLSTATE CORPORATION Investor Supplement - First Quarter 2017 Table of Contents

 
1 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Revenues Property-liability insurance premiums $ 7,959 $ 7,901 $ 7,869 $ 7,814 $ 7,723 Life and annuity premiums and contract charges 593 574 571 564 566 Net investment income 748 801 748 762 731 Realized capital gains and losses: Total other-than-temporary impairment ("OTTI") losses (62) (72) (73) (77) (91) OTTI losses reclassified to (from) other comprehensive income 3 2 - (2) 10 Net OTTI losses recognized in earnings (59) (70) (73) (79) (81) Sales and other realized capital gains and losses 193 72 106 103 (68) Total realized capital gains and losses 134 2 33 24 (149) Total revenues 9,434 9,278 9,221 9,164 8,871 Costs and expenses Property-liability insurance claims and claims expense 5,416 5,083 5,553 5,901 5,684 Life and annuity contract benefits 474 464 484 454 455 Interest credited to contractholder funds 173 168 183 185 190 Amortization of deferred policy acquisition costs 1,169 1,157 1,138 1,126 1,129 Operating costs and expenses 1,097 1,063 1,021 1,040 982 Restructuring and related charges 10 9 5 11 5 Interest expense 85 77 73 72 73 Total costs and expenses 8,424 8,021 8,457 8,789 8,518 Gain on disposition of operations 2 1 1 1 2 Income from operations before income tax expense 1,012 1,258 765 376 355 Income tax expense 317 418 245 105 109 Net income $ 695 $ 840 $ 520 $ 271 $ 246 Preferred stock dividends 29 29 29 29 29 Net income applicable to common shareholders $ 666 $ 811 $ 491 $ 242 $ 217 Earnings per common share: Net income applicable to common shareholders per common share - Basic $ 1.82 $ 2.20 $ 1.32 $ 0.65 $ 0.57 Weighted average common shares - Basic 365.7 368.0 371.5 373.6 378.1 Net income applicable to common shareholders per common share - Diluted $ 1.79 $ 2.18 $ 1.31 $ 0.64 $ 0.57 Weighted average common shares - Diluted 371.3 372.5 375.9 378.1 382.9 Cash dividends declared per common share $ 0.37 $ 0.33 $ 0.33 $ 0.33 $ 0.33 THE ALLSTATE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS ($ in millions, except per share data) Three months ended

 
2 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Contribution to income Net income applicable to common shareholders $ 666 $ 811 $ 491 $ 242 $ 217 Realized capital gains and losses, after-tax (88) (1) (22) (17) 96 Valuation changes on embedded derivatives that are not hedged, after-tax - (6) - 4 4 DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax 3 1 1 1 1 Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax - (2) - - (1) Business combination expenses and the amortization of purchased intangible assets, after-tax 29 4 5 6 6 Gain on disposition of operations, after-tax (2) - (1) (1) (1) Operating income * $ 608 $ 807 $ 474 $ 235 $ 322 Income per common share - Diluted Net income applicable to common shareholders $ 1.79 $ 2.18 $ 1.31 $ 0.64 $ 0.57 Realized capital gains and losses, after-tax (0.24) - (0.06) (0.04) 0.25 Valuation changes on embedded derivatives that are not hedged, after-tax - (0.02) - 0.01 0.01 DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax 0.01 - - - - Reclassification of periodic settlements and accruals on non-hedge derivative instruments, after-tax - - - - - Business combination expenses and the amortization of purchased intangible assets, after-tax 0.08 0.01 0.01 0.01 0.01 Gain on disposition of operations, after-tax - - - - - Operating income * $ 1.64 $ 2.17 $ 1.26 $ 0.62 $ 0.84 Weighted average common shares - Diluted 371.3 372.5 375.9 378.1 382.9 THE ALLSTATE CORPORATION CONTRIBUTION TO INCOME ($ in millions, except per share data) Three months ended

 
3 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Property-Liability Property-Liability insurance premiums $ 7,959 $ 7,901 $ 7,869 $ 7,814 $ 7,723 Net investment income 311 338 310 316 302 Realized capital gains and losses 135 14 53 26 (99) Total Property-Liability revenues 8,405 8,253 8,232 8,156 7,926 Allstate Financial Life and annuity premiums and contract charges 593 574 571 564 566 Net investment income 426 453 427 435 419 Realized capital gains and losses (1) (11) (21) - (49) Total Allstate Financial revenues 1,018 1,016 977 999 936 Corporate and Other Service fees (1) 1 1 1 1 1 Net investment income 11 10 11 11 10 Realized capital gains and losses - (1) 1 (2) (1) Total Corporate and Other revenues before reclassification of services fees 12 10 13 10 10 Reclassification of service fees (1) (1) (1) (1) (1) (1) Total Corporate and Other revenues 11 9 12 9 9 Consolidated revenues $ 9,434 $ 9,278 $ 9,221 $ 9,164 $ 8,871 (1) For presentation in the Consolidated Statements of Operations, service fees of the Corporate and Other segment are reclassified to Operating costs and expenses. THE ALLSTATE CORPORATION REVENUES ($ in millions) Three months ended

 
4 March 31, Dec. 31, Sept. 30, June 30, March 31, March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 2017 2016 2016 2016 2016 Assets Liabilities Investments Reserve for property-liability insurance claims and $ 25,628 $ 25,250 $ 25,450 $ 24,904 $ 24,605 Fixed income securities, at fair value claims expense (amortized cost $57,194, $56,576, Reserve for life-contingent contract benefits 12,223 12,239 12,228 12,215 12,224 $57,775, $55,770 and $55,627) $ 58,636 $ 57,839 $ 60,306 $ 58,129 $ 57,291 Contractholder funds 20,051 20,260 20,583 20,845 21,092 Equity securities, at fair value Unearned premiums 12,705 12,583 12,772 12,300 12,036 (cost $5,026, $5,157, $4,800, Claim payments outstanding 845 879 934 946 852 $4,924 and $4,792) 5,685 5,666 5,288 5,265 5,117 Deferred income taxes 833 487 935 782 479 Mortgage loans 4,349 4,486 4,396 4,453 4,302 Other liabilities and accrued expenses 7,018 6,599 6,122 6,192 5,704 Limited partnership interests 5,982 5,814 5,588 5,407 5,091 Long-term debt 6,346 6,347 5,110 5,109 5,108 Short-term, at fair value Separate Accounts 3,436 3,393 3,469 3,438 3,507 (amortized cost $2,753, $4,288, $1,863, Total liabilities 89,085 88,037 87,603 86,731 85,607 $2,850 and $3,526) 2,753 4,288 1,863 2,850 3,526 Other 3,738 3,706 3,663 3,590 3,550 Equity Total investments 81,143 81,799 81,104 79,694 78,877 Preferred stock and additional capital paid-in, 1,746 1,746 1,746 1,746 1,746 72.2 thousand shares outstanding Common stock, 365 million, 366 million, 368 million, 371 million and 375 million shares outstanding (2) 9 9 9 9 9 Additional capital paid-in 3,285 3,303 3,237 3,203 3,237 Retained income 41,208 40,678 39,990 39,623 39,505 Deferred ESOP expense (6) (6) (13) (13) (13) Treasury stock, at cost (535 million, 534 million, 532 million, 529 million and 525 million shares) (24,887) (24,741) (24,537) (24,310) (23,994) Accumulated other comprehensive income: Unrealized net capital gains and losses: Unrealized net capital gains and losses on fixed income securities with other-than-temporary impairments 59 57 56 49 31 Cash 442 436 389 446 531 Other unrealized net capital gains and losses 1,304 1,091 1,902 1,702 1,259 Premium installment receivables, net 5,649 5,597 5,799 5,593 5,558 Unrealized adjustment to DAC, DSI Deferred policy acquisition costs 3,988 3,954 3,886 3,819 3,807 and insurance reserves (107) (95) (141) (127) (90) Reinsurance recoverables, net (1) 8,723 8,745 8,922 8,650 8,573 Total unrealized net capital gains and losses 1,256 1,053 1,817 1,624 1,200 Accrued investment income 577 567 567 564 567 Unrealized foreign currency translation Property and equipment, net 1,067 1,065 1,013 1,011 1,011 adjustments (53) (50) (48) (41) (46) Goodwill 2,295 1,219 1,219 1,219 1,219 Unrecognized pension and other Other assets 2,923 1,835 2,169 2,850 2,297 postretirement benefit cost (1,400) (1,419) (1,267) (1,288) (1,304) Separate Accounts 3,436 3,393 3,469 3,438 3,507 Total accumulated other comprehensive income (loss) (197) (416) 502 295 (150) Total shareholders' equity 21,158 20,573 20,934 20,553 20,340 Total assets $ 110,243 $ 108,610 $ 108,537 $ 107,284 $ 105,947 Total liabilities and shareholders' equity $ 110,243 $ 108,610 $ 108,537 $ 107,284 $ 105,947 (1) (2) Common shares outstanding were 365,015,746, 365,771,746, 368,126,127, 371,181,913 and 375,417,126 as of March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively. THE ALLSTATE CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ($ in millions) Reinsurance recoverables of unpaid losses related to Property-Liability were $6.18 billion, $6.18 billion, $6.35 billion, $6.03 billion and $5.96 billion as of March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively.

 
5 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Book value per common share Numerator: Common shareholders' equity (1) $ 19,412 $ 18,827 $ 19,188 $ 18,807 $ 18,594 Denominator: Common shares outstanding and dilutive potential common shares outstanding 370.4 370.8 372.7 375.8 380.3 Book value per common share $ 52.41 $ 50.77 $ 51.48 $ 50.05 $ 48.89 Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities Numerator: Common shareholders' equity $ 19,412 $ 18,827 $ 19,188 $ 18,807 $ 18,594 Unrealized net capital gains and losses on fixed income securities 831 727 1,506 1,407 993 Adjusted common shareholders' equity $ 18,581 $ 18,100 $ 17,682 $ 17,400 $ 17,601 Denominator: Common shares outstanding and dilutive potential common shares outstanding 370.4 370.8 372.7 375.8 380.3 Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities * $ 50.16 $ 48.81 $ 47.44 $ 46.30 $ 46.28 (1) BOOK VALUE PER COMMON SHARE THE ALLSTATE CORPORATION ($ in millions, except per share data) Excludes equity related to preferred stock of $1,746 million in each period.

 
6 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Return on Common Shareholders' Equity Numerator: Net income applicable to common shareholders (1) $ 2,210 $ 1,761 $ 1,410 $ 1,540 $ 1,624 Denominator: Beginning common shareholders' equity $ 18,594 $ 18,279 $ 18,758 $ 19,552 $ 20,433 Ending common shareholders' equity 19,412 18,827 19,188 18,807 18,594 Average common shareholders' equity (2) $ 19,003 $ 18,553 $ 18,973 $ 19,180 $ 19,514 Return on common shareholders' equity 11.6 % 9.5 % 7.4 % 8.0 % 8.3 % Operating Income Return on Common Shareholders' Equity Numerator: Operating income * (1) $ 2,124 $ 1,838 $ 1,656 $ 1,792 $ 1,819 Denominator: Beginning common shareholders' equity $ 18,594 $ 18,279 $ 18,758 $ 19,552 $ 20,433 Unrealized net capital gains and losses 1,200 620 879 1,419 2,137 Adjusted beginning common shareholders' equity 17,394 17,659 17,879 18,133 18,296 Ending common shareholders' equity 19,412 18,827 19,188 18,807 18,594 Unrealized net capital gains and losses 1,256 1,053 1,817 1,624 1,200 Adjusted ending common shareholders' equity 18,156 17,774 17,371 17,183 17,394 Average adjusted common shareholders' equity (2) $ 17,775 $ 17,717 $ 17,625 $ 17,658 $ 17,845 Operating income return on common shareholders' equity * 11.9 % 10.4 % 9.4 % 10.1 % 10.2 % (1) Net income applicable to common shareholders and operating income reflect a trailing twelve-month period. (2) THE ALLSTATE CORPORATION RETURN ON COMMON SHAREHOLDERS' EQUITY ($ in millions) Average common shareholders' equity and average adjusted common shareholders' equity are determined using a two-point average, with the beginning and ending common shareholders' equity and adjusted common shareholders' equity, respectively, for the twelve-month period as data points. Twelve months ended

 
7 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Debt Short-term debt $ - $ - $ - $ - $ - Long-term debt 6,346 6,347 5,110 5,109 5,108 Total debt $ 6,346 $ 6,347 $ 5,110 $ 5,109 $ 5,108 Capital resources Debt $ 6,346 $ 6,347 $ 5,110 $ 5,109 $ 5,108 Shareholders' equity Preferred stock and additional capital paid-in 1,746 1,746 1,746 1,746 1,746 Common stock 9 9 9 9 9 Additional capital paid-in 3,285 3,303 3,237 3,203 3,237 Retained income 41,208 40,678 39,990 39,623 39,505 Deferred ESOP expense (6) (6) (13) (13) (13) Treasury stock (24,887) (24,741) (24,537) (24,310) (23,994) Unrealized net capital gains and losses 1,256 1,053 1,817 1,624 1,200 Unrealized foreign currency translation adjustments (53) (50) (48) (41) (46) Unrecognized pension and other postretirement benefit cost (1,400) (1,419) (1,267) (1,288) (1,304) Total shareholders' equity 21,158 20,573 20,934 20,553 20,340 Total capital resources $ 27,504 $ 26,920 $ 26,044 $ 25,662 $ 25,448 Ratio of debt to shareholders' equity 30.0 % 30.9 % 24.4 % 24.9 % 25.1 % Ratio of debt to capital resources 23.1 % 23.6 % 19.6 % 19.9 % 20.1 % THE ALLSTATE CORPORATION DEBT TO CAPITAL ($ in millions)

 
8 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 695 $ 840 $ 520 $ 271 $ 246 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and other non-cash items 119 97 97 97 91 Realized capital gains and losses (134) (2) (33) (24) 149 Gain on disposition of operations (2) (1) (1) (1) (2) Interest credited to contractholder funds 173 168 183 185 190 Changes in: Policy benefits and other insurance reserves 183 (347) 401 118 459 Unearned premiums (248) (178) 478 267 (205) Deferred policy acquisition costs 14 (6) (87) (65) (7) Premium installment receivables, net (19) 194 (209) (38) 11 Reinsurance recoverables, net 11 156 (300) (80) (40) Income taxes 284 387 206 (150) (26) Other operating assets and liabilities (219) (57) 129 64 (152) Net cash provided by operating activities 857 1,251 1,384 644 714 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales Fixed income securities 7,083 5,929 6,543 6,373 6,216 Equity securities 2,601 1,477 1,582 823 1,664 Limited partnership interests 210 247 271 183 180 Mortgage loans - - - (7) 7 Other investments 24 56 62 57 87 Investment collections Fixed income securities 1,029 1,103 1,292 1,189 949 Mortgage loans 223 98 253 71 79 Other investments 174 140 113 125 43 Investment purchases Fixed income securities (8,800) (5,708) (9,335) (7,546) (5,401) Equity securities (2,383) (1,837) (1,441) (939) (1,733) Limited partnership interests (268) (322) (425) (433) (270) Mortgage loans (86) (186) (196) (220) (44) Other investments (219) (211) (225) (196) (253) Change in short-term investments, net 1,572 (2,540) 763 688 (1,357) Change in other investments, net (10) 9 (21) (20) (19) Purchases of property and equipment, net (74) (123) (70) (68) (52) Acquisition of operations (1,356) - - - - Net cash (used in) provided by investing activities (280) (1,868) (834) 80 96 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt - 1,236 - - - Repayments of long-term debt - (1) - - (16) Contractholder fund deposits 257 264 263 261 261 Contractholder fund withdrawals (483) (550) (524) (521) (492) Dividends paid on common stock (122) (122) (124) (125) (115) Dividends paid on preferred stock (29) (29) (29) (29) (29) Treasury stock purchases (264) (183) (250) (448) (456) Shares reissued under equity incentive plans, net 67 41 51 42 30 Excess tax benefits on share-based payment arrangements - 7 5 8 12 Other 3 1 1 3 31 Net cash (used in) provided by financing activities (571) 664 (607) (809) (774) NET INCREASE (DECREASE) IN CASH 6 47 (57) (85) 36 CASH AT BEGINNING OF PERIOD 436 389 446 531 495 CASH AT END OF PERIOD $ 442 $ 436 $ 389 $ 446 $ 531 THE ALLSTATE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in millions) Three months ended

 
9 Amortization relating to realized capital gains and Amortization DAC before DAC after losses and (acceleration) Effect of impact of Impact of impact of Beginning Acquisition Amortization valuation changes on deceleration unrealized Ending unrealized unrealized unrealized balance costs before embedded derivatives for changes in capital gains balance capital gains capital gains capital gains Dec. 31, 2016 deferred adjustments (1)(2) that are not hedged (2) assumptions (2) and losses Mar. 31, 2017 and losses and losses and losses Property-Liability $ 2,188 $ 1,149 (3) $ (1,090) $ - $ - $ - $ 2,247 $ 2,247 $ - $ 2,247 Allstate Financial: Traditional life and accident and health 821 49 (45) - - - 825 825 - 825 Interest-sensitive life 905 22 (29) (4) - (17) 877 1,034 (157) 877 Fixed annuity 40 - (1) - - - 39 39 - 39 Subtotal 1,766 71 (75) (4) - (17) 1,741 1,898 (157) 1,741 Consolidated $ 3,954 $ 1,220 $ (1,165) $ (4) $ - $ (17) $ 3,988 $ 4,145 $ (157) $ 3,988 Amortization relating to realized capital gains and Amortization DAC before DAC after losses and (acceleration) Effect of impact of Impact of impact of Beginning Acquisition Amortization valuation changes on deceleration unrealized Ending unrealized unrealized unrealized balance costs before embedded derivatives for changes in capital gains balance capital gains capital gains capital gains Dec. 31, 2015 deferred adjustments that are not hedged assumptions and losses Mar. 31, 2016 and losses and losses and losses Property-Liability $ 2,029 $ 1,068 $ (1,056) $ - $ - $ - $ 2,041 $ 2,041 $ - $ 2,041 Allstate Financial: Traditional life and accident and health 792 46 (42) - - - 796 796 - 796 Interest-sensitive life 993 26 (28) (2) - (65) 924 1,055 (131) 924 Fixed annuity 47 - (1) - - - 46 46 - 46 Subtotal 1,832 72 (71) (2) - (65) 1,766 1,897 (131) 1,766 Consolidated $ 3,861 $ 1,140 $ (1,127) $ (2) $ - $ (65) $ 3,807 $ 3,938 $ (131) $ 3,807 (1) (2) Included as a component of amortization of DAC on the Consolidated Statements of Operations. (3) Includes $70 million recorded in connection with the SquareTrade acquisition on January 3, 2017. Reconciliation of Deferred Policy Acquisition Costs as of March 31, 2016 Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged and amortization acceleration/deceleration for changes in assumptions. THE ALLSTATE CORPORATION ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS ($ in millions) Change in Deferred Policy Acquisition Costs Reconciliation of Deferred Policy For the three months ended March 31, 2017 Acquisition Costs as of March 31, 2017 Change in Deferred Policy Acquisition Costs For the three months ended March 31, 2016

 
10 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Premiums written $ 7,723 $ 7,723 $ 8,311 $ 8,051 $ 7,515 Decrease (increase) in unearned premiums 234 189 (472) (264) 166 Other 2 (11) 30 27 42 Premiums earned 7,959 7,901 7,869 7,814 7,723 Claims and claims expense (5,416) (5,083) (5,553) (5,901) (5,684) Amortization of deferred policy acquisition costs (1,090) (1,086) (1,068) (1,057) (1,056) Operating costs and expenses (936) (927) (888) (912) (853) Restructuring and related charges (10) (9) (5) (10) (5) Underwriting income (loss) 507 796 355 (66) 125 Net investment income 311 338 310 316 302 Income tax expense on operations (255) (383) (218) (70) (141) Realized capital gains and losses, after-tax 89 10 36 18 (64) Net income applicable to common shareholders $ 652 $ 761 $ 483 $ 198 $ 222 Catastrophe losses $ 781 $ 303 $ 481 $ 961 $ 827 Amortization of purchased intangible assets $ 25 $ 5 $ 9 $ 9 $ 9 Operating ratios Claims and claims expense ("loss") ratio 68.0 64.3 70.6 75.5 73.6 Expense ratio 25.6 25.6 24.9 25.3 24.8 Combined ratio 93.6 89.9 95.5 100.8 98.4 Loss ratio 68.0 64.3 70.6 75.5 73.6 Less: effect of catastrophe losses 9.8 3.8 6.1 12.3 10.7 effect of prior year non-catastrophe reserve reestimates (1.3) (1.6) 1.3 (0.2) 0.4 Underlying loss ratio * 59.5 62.1 63.2 63.4 62.5 Expense ratio 25.6 25.6 24.9 25.3 24.8 Less: effect of amortization of purchased intangible assets 0.3 - 0.1 0.1 0.1 Expense ratio, excluding the effect of amortization of purchased intangible assets 25.3 25.6 24.8 25.2 24.7 Reconciliation of combined ratio to underlying combined ratio Combined ratio 93.6 89.9 95.5 100.8 98.4 Effect of catastrophe losses (9.8) (3.8) (6.1) (12.3) (10.7) Effect of prior year non-catastrophe reserve reestimates 1.3 1.6 (1.3) 0.2 (0.4) Effect of amortization of purchased intangible assets (0.3) - (0.1) (0.1) (0.1) Underlying combined ratio * 84.8 87.7 88.0 88.6 87.2 Effect of restructuring and related charges on combined ratio 0.1 0.1 0.1 0.1 0.1 Effect of Discontinued Lines and Coverages on combined ratio - - 1.3 - - THE ALLSTATE CORPORATION PROPERTY-LIABILITY RESULTS ($ in millions) Three months ended

 
11 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Property-Liability Underwriting Summary Allstate Protection $ 509 $ 799 $ 455 $ (64) $ 127 Discontinued Lines and Coverages (2) (3) (100) (2) (2) Underwriting income (loss) $ 507 $ 796 $ 355 $ (66) $ 125 Allstate Protection Underwriting Summary Premiums written $ 7,723 $ 7,722 $ 8,309 $ 8,051 $ 7,515 Premiums earned $ 7,959 $ 7,901 $ 7,869 $ 7,814 $ 7,723 Claims and claims expense (5,414) (5,080) (5,454) (5,899) (5,683) Amortization of deferred policy acquisition costs (1,090) (1,086) (1,068) (1,057) (1,056) Operating costs and expenses (936) (927) (887) (912) (852) Restructuring and related charges (10) (9) (5) (10) (5) Underwriting income (loss) $ 509 $ 799 $ 455 $ (64) $ 127 Catastrophe losses $ 781 $ 303 $ 481 $ 961 $ 827 Operating ratios Loss ratio 68.0 64.3 69.3 75.5 73.6 Expense ratio 25.6 25.6 24.9 25.3 24.8 Combined ratio 93.6 89.9 94.2 100.8 98.4 Effect of catastrophe losses on combined ratio 9.8 3.8 6.1 12.3 10.7 Effect of restructuring and related charges on combined ratio 0.1 0.1 0.1 0.1 0.1 Effect of amortization of purchased intangible assets on combined ratio 0.3 - 0.1 0.1 0.1 Discontinued Lines and Coverages Underwriting Summary Premiums written $ - $ 1 $ 2 $ - $ - Premiums earned $ - $ - $ - $ - $ - Claims and claims expense (2) (3) (99) (2) (1) Operating costs and expenses - - (1) - (1) Underwriting loss $ (2) $ (3) $ (100) $ (2) $ (2) Effect of Discontinued Lines and Coverages on the Property-Liability combined ratio - - 1.3 - 0.1 Allstate Protection Underwriting Income (Loss) by Brand Allstate brand $ 588 $ 793 $ 493 $ (10) $ 171 Esurance brand (10) (21) (41) (37) (25) Encompass brand (33) 29 5 (15) (18) SquareTrade (35) - - - - Answer Financial (1) (2) (2) (2) (1) Underwriting income (loss) $ 509 $ 799 $ 455 $ (64) $ 127 THE ALLSTATE CORPORATION PROPERTY-LIABILITY UNDERWRITING RESULTS BY AREA OF BUSINESS ($ in millions) Three months ended

 
12 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Allstate brand (1) Auto $ 4,882 $ 4,756 $ 4,940 $ 4,767 $ 4,746 Homeowners 1,403 1,638 1,869 1,831 1,392 Landlord 120 133 141 133 122 Renter 67 68 84 75 67 Condominium 55 63 70 67 53 Other 126 129 152 153 111 Other personal lines 368 393 447 428 353 Commercial lines 123 115 123 135 126 Other business lines 173 158 185 183 183 6,949 7,060 7,564 7,344 6,800 Esurance brand Auto 439 382 428 376 439 Homeowners 16 15 16 14 11 Other personal lines 2 2 2 2 2 457 399 446 392 452 Encompass brand Auto 125 138 153 162 138 Homeowners 91 103 121 126 104 Other personal lines 20 22 25 27 21 236 263 299 315 263 SquareTrade 81 - - - - Allstate Protection 7,723 7,722 8,309 8,051 7,515 Discontinued Lines and Coverages (2) - 1 2 - - Property-Liability $ 7,723 $ 7,723 $ 8,311 $ 8,051 $ 7,515 Allstate Protection Auto $ 5,446 $ 5,276 $ 5,521 $ 5,305 $ 5,323 Homeowners 1,510 1,756 2,006 1,971 1,507 Other personal lines 390 417 474 457 376 Commercial lines 123 115 123 135 126 Other business lines 173 158 185 183 183 SquareTrade 81 - - - - $ 7,723 $ 7,722 $ 8,309 $ 8,051 $ 7,515 (1) Canada premiums included in Allstate brand Auto $ 171 $ 182 $ 220 $ 234 $ 164 Homeowners 44 52 64 64 41 Other personal lines 12 13 16 16 10 $ 227 $ 247 $ 300 $ 314 $ 215 (2) Primarily represents retrospective reinsurance premium recognized when billed. THE ALLSTATE CORPORATION PROPERTY-LIABILITY PREMIUMS WRITTEN BY BRAND ($ in millions) Three months ended

 
13 Number of Location Number of Location Number of Location locations (7) Total brand (%) (8) specific (%) (9) locations Total brand (%) specific (%) locations Total brand (%) specific (%) Allstate brand Auto (2)(3)(4) 18 1.7 (10) 5.3 (10) 23 1.3 5.6 25 1.0 7.1 Homeowners (5)(6) 14 1.0 4.2 12 0.5 4.7 10 0.2 4.6 Esurance brand Auto 7 0.7 5.3 13 2.2 6.2 9 0.4 2.3 Homeowners - - - 1 (0.5) (10.0) N/A N/A N/A Encompass brand Auto 5 1.5 7.2 8 3.2 9.9 9 1.6 8.8 Homeowners 3 0.2 3.4 6 0.6 3.3 5 1.4 9.2 Number of Location Number of Location Number of Location locations Total brand (%) specific (%) locations Total brand (%) specific (%) locations Total brand (%) specific (%) Allstate brand Auto (2)(3)(4) 35 3.2 6.2 25 1.7 7.3 34 1.9 5.5 Homeowners (5)(6) 11 0.8 4.9 15 (0.4) (2.3) 16 1.5 6.1 Esurance brand Auto 15 1.3 5.6 6 0.3 2.7 18 3.0 6.7 Homeowners N/A N/A N/A N/A N/A N/A N/A N/A N/A Encompass brand Auto 10 4.1 9.5 4 1.6 14.3 9 2.0 5.7 Homeowners 6 1.7 8.1 5 1.4 11.6 5 1.7 7.4 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) THE ALLSTATE CORPORATION PROPERTY-LIABILITY IMPACT OF NET RATE CHANGES APPROVED ON PREMIUMS WRITTEN Three months ended Impacts of Allstate brand auto effective rate changes as a percentage of total brand prior year-end premiums written were 1.1%, 1.1%, 1.5%, 3.4%, 1.4% and 1.8% for the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, respectively. Rate changes are included in the effective calculations in the period the rate change is effective for renewal contracts. Three months ended Three months ended December 31, 2016March 31, 2017 (1) March 31, 2016 December 31, 2015 Rate changes include changes approved based on our net cost of reinsurance. These rate changes do not reflect initial rates filed for insurance subsidiaries initially writing business. Based on historical premiums written in those 50 states, the District of Columbia and Canadian provinces, rate changes approved for Allstate brand, Esurance brand and Encompass brand for the three month period ending March 31, 2017 are estimated to total $428 million. Rate changes do not include rating plan enhancements, including the introduction of discounts and surcharges that result in no change in the overall rate level in a location. Includes a rate increase in California in first quarter 2017. Excluding California, Allstate brand auto total brand and location specific rate changes were 1.1% and 4.7% for the three months ended March 31, 2017, respectively. September 30, 2016 June 30, 2016 Three months ended Three months ended Three months ended Represents the impact in the states, the District of Columbia and Canadian provinces where rate changes were approved during the period as a percentage of total brand prior year-end premiums written. Represents the impact in the states, the District of Columbia and Canadian provinces where rate changes were approved during the period as a percentage of its respective total prior year-end premiums written in those same locations. Impacts of Allstate brand homeowners effective rate changes as a percentage of total brand prior year-end premiums written were 0.9%, 0.6%, 0.6%, 0.5%, 0.7% and 0.5% for the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016, and December 31, 2015, respectively. Allstate brand auto and homeowners operates in 50 states, the District of Columbia, and 5 Canadian provinces. Esurance brand auto operates in 43 states and 1 Canadian province. Esurance brand homeowners operates in 31 states and 2 Canadian provinces. Encompass brand auto and homeowners operates in 40 states and the District of Columbia. Allstate brand auto rate changes were 7.2%, 7.2%, 7.8%, 8.4% and 6.7% for the trailing twelve months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively. Allstate brand auto rate changes were cumulatively $2.61 billion or 14.2% in 2017, 2016 and 2015. Allstate brand homeowner rate changes were cumulatively $335 million or 4.9% in 2017, 2016 and 2015.

 
14 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Policies in Force statistics (in thousands) (1) Allstate brand Auto (2) 19,565 19,742 19,852 20,061 20,145 Homeowners (3)(4) 6,090 6,120 6,131 6,158 6,176 Landlord 710 716 720 726 732 Renter 1,563 1,568 1,557 1,554 1,556 Condominium 663 666 665 667 667 Other 1,264 1,264 1,260 1,256 1,253 Other personal lines 4,200 4,214 4,202 4,203 4,208 Commercial lines 272 285 296 308 318 Allstate Roadside Services (5) 743 768 797 824 856 Allstate Dealer Services (6)(7) 4,150 4,142 4,125 4,059 3,987 Other business lines 4,893 4,910 4,922 4,883 4,843 Total 35,020 35,271 35,403 35,613 35,690 Esurance brand Auto 1,400 1,391 1,395 1,409 1,428 Homeowners 63 58 52 44 37 Other personal lines 48 47 47 47 46 Total 1,511 1,496 1,494 1,500 1,511 Encompass brand Auto 595 622 649 676 701 Homeowners 284 295 305 318 329 Other personal lines 94 98 101 105 108 Total 973 1,015 1,055 1,099 1,138 SquareTrade (8) 29,907 - - - - Total Policies in Force (9) 67,411 37,782 37,952 38,212 38,339 Non-Proprietary Premiums ($ in millions) Ivantage (10) $ 1,566 $ 1,544 $ 1,531 $ 1,528 $ 1,504 Answer Financial (11) 153 140 158 150 151 Agency Data (12) Total Allstate agencies (13) 12,200 12,200 12,200 12,200 12,100 Licensed sales professionals (14) 23,600 23,800 23,600 23,800 24,000 Allstate independent agencies (15) 2,200 2,200 2,200 2,000 2,100 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) Allstate Roadside Services represents memberships in force. Allstate Roadside Services statistics do not include their wholesale partners as the customer relationship is managed by the wholesale partner. Allstate Roadside Services also has Good Hands Rescue, our pay-per-use roadside assistance product, which performed 5,636 and 21,908 services as of the three months end March 31, 2017 and for the year-ended December 31, 2016, respectively. Allstate Dealer Services represents service contracts and other products sold in conjunction with auto lending and vehicle sales transactions. Allstate Dealer Services statistics do not include their third party administrators (“TPAs”) as the customer relationship is managed by the TPAs. Allstate brand auto PIF increased in 9 states, including 1 of our largest 10 states, as of March 31, 2017 compared to March 31, 2016. Allstate brand homeowners PIF increased in 15 states, including 2 of our largest 10 states, as of March 31, 2017 compared to March 31, 2016. THE ALLSTATE CORPORATION PROPERTY-LIABILITY POLICIES IN FORCE AND OTHER STATISTICS Included in Allstate brand homeowners PIF is 20, 21, 22, 23 and 24 thousand of PIF related to North Light Specialty Insurance Company, our excess and surplus line, in the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively. Policy counts are based on items rather than customers. A multi-car customer would generate multiple item (policy) counts, even if all cars were insured under one policy. Non- proprietary products offered by Ivantage (insurance agency) and Answer Financial (independent insurance agency) are not included. Starting in the first quarter 2017, Allstate Dealer Services PIF has been included in the Allstate brand and other business lines totals. Employees of Allstate agencies who are licensed to sell Allstate products. Includes 472 and 488 engaged Allstate independent agencies (“AIAs”) as of March 31, 2017 and December 31, 2016, respectively. Engaged AIAs, as currently determined, include those that achieve a minimum number of new policies written. SquareTrade represents active consumer product protection plans. Represents non-proprietary premiums under management as of the end of the period related to personal and commercial line products offered by Ivantage when an Allstate product is not available. Fees for the three months ended March 31, 2017 were $23.3 million. Represents non-proprietary premiums written for the period. Commissions earned for the three months ended March 31, 2017 were $18.0 million. Rounded to the nearest hundred. Total Allstate agencies represents exclusive Allstate agencies and financial representatives in the United States and Canada. Consolidated PIF, including Property-Liability and Allstate Financial, totaled 73,666 thousand as of March 31, 2017.

 
15 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Net premiums written $ 6,949 $ 7,060 $ 7,564 $ 7,344 $ 6,800 Net premiums earned Auto $ 4,839 $ 4,826 $ 4,793 $ 4,745 $ 4,667 Homeowners 1,688 1,691 1,683 1,684 1,678 Other personal lines 405 403 399 397 393 Commercial lines 125 123 127 127 129 Other business lines 141 145 150 142 143 Total 7,198 7,188 7,152 7,095 7,010 Incurred losses Auto $ 3,224 $ 3,416 $ 3,610 $ 3,634 $ 3,519 Homeowners 1,194 765 893 1,260 1,190 Other personal lines 265 234 236 256 261 Commercial lines 96 109 112 135 119 Other business lines 52 60 69 64 61 Total 4,831 4,584 4,920 5,349 5,150 Expenses Auto $ 1,161 $ 1,181 $ 1,134 $ 1,168 $ 1,103 Homeowners 387 396 384 373 377 Other personal lines 112 117 113 106 103 Commercial lines 33 34 34 35 38 Other business lines 86 83 74 74 68 Total 1,779 1,811 1,739 1,756 1,689 Underwriting income (loss) Auto $ 454 $ 229 $ 49 $ (57) $ 45 Homeowners 107 530 406 51 111 Other personal lines 28 52 50 35 29 Commercial lines (4) (20) (19) (43) (28) Other business lines 3 2 7 4 14 Total 588 793 493 (10) 171 Loss ratio 67.1 63.8 68.8 75.4 73.5 Expense ratio 24.7 25.2 24.3 24.7 24.1 Combined ratio 91.8 89.0 93.1 100.1 97.6 Loss ratio 67.1 63.8 68.8 75.4 73.5 Less: effect of catastrophe losses 9.8 4.0 6.2 12.9 11.2 effect of prior year non-catastrophe reserve reestimates (1.5) (1.5) - (0.3) 0.3 Underlying loss ratio * 58.8 61.3 62.6 62.8 62.0 Expense ratio 24.7 25.2 24.3 24.7 24.1 Less: effect of amortization of purchased intangible assets - - - - - Expense ratio, excluding the effect of amortization of purchased intangible assets 24.7 25.2 24.3 24.7 24.1 Reconciliation of combined ratio to underlying combined ratio Combined ratio 91.8 89.0 93.1 100.1 97.6 Effect of catastrophe losses (9.8) (4.0) (6.2) (12.9) (11.2) Effect of prior year non-catastrophe reserve reestimates 1.5 1.5 - 0.3 (0.3) Effect of amortization of purchased intangible assets - - - - - Underlying combined ratio * 83.5 86.5 86.9 87.5 86.1 Effect of prior year reserve reestimates on combined ratio (1.5) (1.6) - - 0.2 Effect of advertising expenses on combined ratio 2.0 2.4 2.2 2.2 1.5 THE ALLSTATE CORPORATION ALLSTATE BRAND PROFITABILITY MEASURES ($ in millions) Three months ended

 
16 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 New Issued Applications (in thousands) (2) Auto (3) 610 562 584 582 584 Homeowners (4) 163 167 188 193 164 Average Premium - Gross Written ($) (5) Auto 538 537 532 516 507 Homeowners 1,187 1,181 1,181 1,171 1,174 Average Premium - Net Earned ($) (6) Auto 492 487 479 471 461 Homeowners 1,106 1,105 1,099 1,090 1,082 Renewal Ratio (%) (7) Auto 87.4 87.4 87.5 88.0 88.0 Homeowners 87.1 87.5 87.9 87.8 88.1 Auto Claim Frequency (8) (% change year-over-year) Bodily Injury Gross (6.0) (2.0) 0.3 2.8 1.1 Bodily Injury Paid (9) (20.5) (19.2) (19.6) 1.5 5.9 Property Damage Gross (10) (3.9) 1.2 3.9 5.6 2.1 Property Damage Paid (11) (3.2) (1.2) 0.1 (0.1) 2.4 Auto Paid Claim Severity (12) (% change year-over-year) Bodily injury (9) 25.1 18.8 12.4 (2.3) (5.5) Property damage 4.8 1.9 1.9 5.3 7.5 Homeowners Excluding Catastrophe Losses (% change year-over-year) Gross Claim frequency (8) 7.6 2.2 5.2 (12.5) (7.7) Paid Claim frequency (8) 2.3 (0.5) 0.7 (14.3) (2.0) Paid Claim severity 4.1 1.8 (0.5) 4.7 (2.7) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Paid claim severity is calculated by dividing the sum of paid losses and loss expenses by claims closed with a payment during the period. The rate of change in paid severity is the year over year percent increase or decrease in paid claim severity for the period. THE ALLSTATE CORPORATION ALLSTATE BRAND STATISTICS (1) Three months ended Statistics presented for Allstate brand exclude excess and surplus lines. New Issued Applications: Item counts of automobiles or homeowners insurance applications for insurance policies that were issued during the period, regardless of whether the customer was previously insured by another Allstate Protection brand. Allstate brand includes automobiles added by existing customers when they exceed the number allowed (currently 10) on a policy. Average Premium - Gross Written: Gross premiums written divided by issued item count. Gross premiums written include the impacts from discounts, surcharges and ceded reinsurance premiums and exclude the impacts from mid-term premium adjustments and premium refund accruals. Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners. Average Premium - Net Earned: Earned premium divided by average policies in force for the period. Earned premium includes the impacts from mid-term premium adjustments and ceded reinsurance, but does not include impacts of premium refund accruals. Average premiums represent the appropriate policy term for each line, which is 6 months for auto and 12 months for homeowners. Renewal ratio: Renewal policies issued during the period, based on contract effective dates, divided by the total policies issued 6 months prior for auto or 12 months prior for homeowners. Approximately 60% of states, including 4 of our 10 largest states, experienced increases in new issued applications in the first quarter of 2017 compared to the first quarter of 2016. Quote volume increased in the first quarter of 2017 compared to the first quarter of 2016, with approximately 70% of our states increasing, including 7 of our largest 10, above prior year. Of our largest 10 states, 4 experienced increases in new issued applications in the first quarter of 2017 compared to the first quarter of 2016. Although in total quote volume decreased slightly in the first quarter of 2017 compared to the first quarter of 2016, over half of our states, including 4 of our largest 10, experienced increases in quote volume in the first quarter of 2017 compared to the first quarter of 2016. Approximately 80% of individual states experienced a year over year decrease in property damage paid claim frequency in first quarter 2017 when compared to first quarter 2016. These declines were observed mainly in January and February, as the country broadly experienced milder than normal winter weather. The paid claim frequency is calculated as annualized notice counts closed with payment in the period divided by the average of policies in force with the applicable coverage during the period. The gross claim frequency is calculated as annualized notice counts received in the period divided by the average of policies in force with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment). Frequency statistics exclude counts associated with catastrophe events. The percent change in paid or gross claim frequency is calculated as the amount of increase or decrease in the paid or gross claim frequency in the current period compared to the same period in the prior year; divided by the prior year paid or gross claim frequency. Decreases in bodily injury paid claim frequency and the related increase in severity reflect payment mix and claim closure patterns that were impacted by changes in bodily injury claim processes in the second half of 2016 related to enhanced documentation of injuries and related medical treatments. Paid claim severity was impacted by a reduced number of claims opened and a change in the mix of paid claims toward a higher proportion of larger severity payments and increases in medical inflationary trends that were offset by improvements in loss cost management. With the increase in auto frequency experienced in recent quarters, claim handling processes were modified to more completely identify instances of liability at first notice of loss. Changes in property damage claim opening practices can impact gross claim frequency comparisons to prior year. This resulted in an increase in the number of counted claims as well as an increase in claims closed without payment, as in many instances, we were ultimately not required to provide indemnification.

 
17 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Change in auto claim frequency (2) (% change in frequency rate year over year) % Change in gross claim frequency -2.9% 1.2% -1.8% -3.1% -2.4% -1.1% 0.8% -1.7% -0.3% -2.8% -1.3% 4.0% 6.8% 6.8% 6.4% 3.9% 1.1% 2.8% 0.3% -2.0% -6.0% % Change in paid claim frequency (3) -0.2% 1.1% -1.0% 0.7% -2.3% -2.7% -2.1% -4.7% -4.7% -3.8% 0.2% 4.7% 2.3% 6.0% 3.5% 0.0% 5.9% 1.5% -19.6% -19.2% -20.5% (1) Frequency statistics exclude counts associated with catastrophe events. (2) (3) THE ALLSTATE CORPORATION ALLSTATE BRAND AUTO CLAIM FREQUENCY ANALYSIS (1) BODILY INJURY % CHANGE IN GROSS AND PAID CLAIM FREQUENCY RATE The paid claim frequency is calculated as annualized notice counts closed with payment in the period divided by the average of policies in force with the applicable coverage during the period. The gross claim frequency is calculated as annualized notice counts received in the period divided by the average of policies in force with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment). Frequency statistics exclude counts associated with catastrophe events. The percent change in paid or gross claim frequency is calculated as the amount of increase or decrease in the paid or gross claim frequency in the current period compared to the same period in the prior year; divided by the prior year paid or gross claim frequency. Decreases in bodily injury paid claim frequency and the related increase in severity as depicted on page 16 reflect payment mix and claim closure patterns that were impacted by changes in bodily injury claim processes in the second half of 2016 related to enhanced documentation of injuries and related medical treatments. Paid claim severity was impacted by a reduced number of claims opened and a change in the mix of paid claims toward a higher proportion of larger severity payments and increases in medical inflationary trends that were offset by improvements in loss cost management. 2012 2013 2014 2015 2016 -24.0% -20.0% -16.0% -12.0% -8.0% -4.0% 0.0% 4.0% 8.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 2015 2016 2017 % c ha ng e ye ar -o ve r- ye ar Rates of change in auto bodily injury frequency % change in gross claim frequency % change in paid claim frequency

 
18 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Change in auto claim frequency (2) (% change in frequency rate year over year) % Change in gross claim frequency (3) -4.8% 0.7% -1.8% -4.3% -0.7% -0.3% 0.6% 1.4% 5.1% -2.4% -1.0% 0.5% 2.1% 6.9% 8.9% 7.5% 2.1% 5.6% 3.9% 1.2% -3.9% % Change in paid claim frequency (4) -4.3% -0.3% -3.4% -4.1% -4.5% 0.5% 3.7% 0.8% 2.9% -0.4% 0.4% 2.5% 2.5% 4.2% 4.7% 3.7% 2.4% -0.1% 0.1% -1.2% -3.2% (1) Frequency statistics exclude counts associated with catastrophe events. (2) (3) (4) Approximately 80% of individual states experienced a year over year decrease in property damage paid claim frequency in first quarter 2017 when compared to first quarter 2016. These declines were observed mainly in January and February, as the country broadly experienced milder than normal winter weather. The paid claim frequency is calculated as annualized notice counts closed with payment in the period divided by the average of policies in force with the applicable coverage during the period. The gross claim frequency is calculated as annualized notice counts received in the period divided by the average of policies in force with the applicable coverage during the period. Gross claim frequency includes all actual notice counts, regardless of their current status (open or closed) or their ultimate disposition (closed with a payment or closed without payment). Frequency statistics exclude counts associated with catastrophe events. The percent change in paid or gross claim frequency is calculated as the amount of increase or decrease in the paid or gross claim frequency in the current period compared to the same period in the prior year; divided by the prior year paid or gross claim frequency. With the increase in auto frequency experienced in recent quarters, claim handling processes were modified to more completely identify instances of liability at first notice of loss. Changes in property damage claim opening practices can impact gross claim frequency comparisons to prior year. This resulted in an increase in the number of counted claims as well as an increase in claims closed without payment, as in many instances, we were ultimately not required to provide indemnification. THE ALLSTATE CORPORATION ALLSTATE BRAND AUTO CLAIM FREQUENCY ANALYSIS (1) PROPERTY DAMAGE % CHANGE IN GROSS AND PAID CLAIM FREQUENCY 2012 2013 2014 2015 2016 -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2012 2013 2014 2015 2016 2017 % c ha ng e ye ar -o ve r- ye ar Rates of change in auto property damage frequency % Change in gross claim frequency % Change in paid claim frequency

 
19 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Net premiums written $ 457 $ 399 $ 446 $ 392 $ 452 Net premiums earned Auto $ 403 $ 408 $ 405 $ 403 $ 394 Homeowners 14 13 11 10 8 Other personal lines 2 2 2 2 2 Total 419 423 418 415 404 Incurred losses Auto $ 300 $ 310 $ 313 $ 308 $ 289 Homeowners 13 8 11 10 4 Other personal lines 1 1 2 1 1 Total 314 319 326 319 294 Expenses Auto $ 107 $ 114 $ 111 $ 107 $ 123 Homeowners 8 10 22 25 11 Other personal lines - 1 - 1 1 Total 115 125 133 133 135 Underwriting income (loss) Auto (1) $ (4) $ (16) $ (19) $ (12) $ (18) Homeowners (7) (5) (22) (25) (7) Other personal lines 1 - - - - Total (10) (21) (41) (37) (25) Loss ratio 74.9 75.4 78.0 76.9 72.8 Expense ratio 27.5 29.6 31.8 32.0 33.4 Combined ratio 102.4 105.0 109.8 108.9 106.2 Loss ratio 74.9 75.4 78.0 76.9 72.8 Less: effect of catastrophe losses 1.9 1.2 3.3 3.4 0.7 effect of prior year non-catastrophe reserve reestimates - (2.1) (1.0) (1.0) (1.0) Underlying loss ratio * 73.0 76.3 75.7 74.5 73.1 Expense ratio 27.5 29.6 31.8 32.0 33.4 Less: effect of amortization of purchased intangible assets 0.3 0.9 1.5 1.7 1.5 Expense ratio, excluding the effect of amortization of purchased intangible assets 27.2 28.7 30.3 30.3 31.9 Reconciliation of combined ratio to underlying combined ratio Combined ratio (1)(2) 102.4 105.0 109.8 108.9 106.2 Effect of catastrophe losses (1.9) (1.2) (3.3) (3.4) (0.7) Effect of prior year non-catastrophe reserve reestimates - 2.1 1.0 1.0 1.0 Effect of amortization of purchased intangible assets (0.3) (0.9) (1.5) (1.7) (1.5) Underlying combined ratio * (2) 100.2 105.0 106.0 104.8 105.0 Effect of prior year reserve reestimates on combined ratio - (2.1) (1.0) (1.0) (1.0) Effect of advertising expenses on combined ratio (2) 8.6 9.2 11.7 12.2 11.6 Policies in Force (in thousands) Auto 1,400 1,391 1,395 1,409 1,428 Homeowners 63 58 52 44 37 Other personal lines 48 47 47 47 46 1,511 1,496 1,494 1,500 1,511 New Issued Applications (in thousands) Auto 143 137 151 141 168 Homeowners 8 9 10 11 7 Other personal lines 8 8 9 8 10 159 154 170 160 185 Average Premium - Gross Written ($) Auto 571 555 546 538 547 Homeowners 919 861 872 855 891 Renewal Ratio (%) Auto 80.4 79.3 78.9 80.0 79.6 Homeowners (3) 83.5 82.9 83.1 83.8 81.6 (1) (2) (3) Esurance’s renewal ratios exclude the impact of risk related cancellations. Customers can enter into a policy without a physical inspection. During the underwriting review period, a number of policies may be canceled if upon inspection the condition is unsatisfactory, causing the renewal ratio to appear lower. Auto underwriting income includes an underwriting loss related to Esurance expansion into Canada of $2 million or 0.5 points on the combined ratio and underlying combined ratio in both the first quarter of 2017 and 2016. Advertising expenses for US Auto and Homeowners were $34 million and $2 million in first quarter 2017 compared to $42 million and $5 million in first quarter 2016, respectively. The effect of Esurance brand US Auto and Homeowners advertising expenses on the Esurance combined ratio and underlying combined ratio was 8.1 points and 0.5 points in first quarter 2017 compared to 10.4 points and 1.2 points in first quarter 2016, respectively. Our advertising actions were impacted due to strategic reductions in marketing spending as a result of profitability actions. THE ALLSTATE CORPORATION ESURANCE PROFITABILITY MEASURES AND STATISTICS ($ in millions) Three months ended

 
20 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Net premiums written $ 236 $ 263 $ 299 $ 315 $ 263 Net premiums earned Auto $ 146 $ 151 $ 155 $ 158 $ 159 Homeowners 113 115 119 121 124 Other personal lines 24 24 25 25 26 Total 283 290 299 304 309 Incurred losses Auto $ 104 $ 104 $ 117 $ 130 $ 123 Homeowners 108 60 74 85 85 Other personal lines 21 13 17 16 31 Total 233 177 208 231 239 Expenses Auto $ 43 $ 44 $ 44 $ 45 $ 45 Homeowners 33 33 34 36 36 Other personal lines 7 7 8 7 7 Total 83 84 86 88 88 Underwriting income (loss) Auto $ (1) $ 3 $ (6) $ (17) $ (9) Homeowners (28) 22 11 - 3 Other personal lines (4) 4 - 2 (12) Total (33) 29 5 (15) (18) Loss ratio 82.4 61.0 69.6 76.0 77.3 Expense ratio 29.3 29.0 28.7 28.9 28.5 Combined ratio 111.7 90.0 98.3 104.9 105.8 Loss ratio 82.4 61.0 69.6 76.0 77.3 Less: effect of catastrophe losses 23.7 3.1 9.0 11.2 13.3 effect of prior year non-catastrophe reserve reestimates 1.4 (3.8) - 0.9 4.2 Underlying loss ratio * 57.3 61.7 60.6 63.9 59.8 Expense ratio 29.3 29.0 28.7 28.9 28.5 Less: effect of amortization of purchased intangible assets - - - - - Expense ratio, excluding the effect of amortization of purchased intangible assets 29.3 29.0 28.7 28.9 28.5 Reconciliation of combined ratio to underlying combined ratio Combined ratio 111.7 90.0 98.3 104.9 105.8 Effect of catastrophe losses (23.7) (3.1) (9.0) (11.2) (13.3) Effect of prior year non-catastrophe reserve reestimates (1.4) 3.8 - (0.9) (4.2) Underlying combined ratio * 86.6 90.7 89.3 92.8 88.3 Effect of prior year reserve reestimates on combined ratio 2.1 (3.8) 0.3 0.3 4.5 Effect of advertising expenses on combined ratio - 0.3 - 0.3 - Policies in Force (in thousands) Auto 595 622 649 676 701 Homeowners 284 295 305 318 329 Other personal lines 94 98 101 105 108 973 1,015 1,055 1,099 1,138 New Issued Applications (in thousands) Auto 12 11 13 15 15 Homeowners 7 7 9 9 9 Average Premium - Gross Written ($) Auto 1,057 1,043 1,022 988 981 Homeowners 1,659 1,650 1,659 1,629 1,618 Renewal Ratio (%) Auto 73.1 73.1 73.1 75.5 76.1 Homeowners 78.2 78.3 77.9 79.9 81.5 THE ALLSTATE CORPORATION ENCOMPASS BRAND PROFITABILITY MEASURES AND STATISTICS ($ in millions) Three months ended

 
21 March 31, Dec. 31, Sept. 30, June 30, March 31, ($ in millions) 2017 2016 2016 2016 2016 Net premiums written $ 81 $ - $ - $ - $ - Net premiums earned $ 59 $ - $ - $ - $ - Incurred losses $ (36) $ - $ - $ - $ - Expenses $ (58) $ - $ - $ - $ - Underwriting loss $ (35) $ - $ - $ - $ - Loss ratio 61.0 - - - - Expense ratio 98.3 - - - - Combined ratio 159.3 - - - - Reconciliation of combined ratio to underlying combined ratio Combined ratio 159.3 - - - - Effect of amortization of purchased intangible assets (39.0) - - - - Underlying combined ratio * 120.3 - - - - Effect of advertising expenses on combined ratio 8.5 - - - - Policies in Force (in thousands) 29,907 - - - - (1) SquareTrade was acquired on January 3, 2017 and therefore is only included in three months ended March 31, 2017 results. THE ALLSTATE CORPORATION SQUARETRADE PROFITABILITY MEASURES (1) Three months ended

 
22 March 31, Dec. 31, Sept. 30, June 30, March 31, ($ in millions) 2017 2016 2016 2016 2016 Net premiums written Allstate brand $ 4,882 $ 4,756 $ 4,940 $ 4,767 $ 4,746 Esurance brand 439 382 428 376 439 Encompass brand 125 138 153 162 138 5,446 5,276 5,521 5,305 5,323 Net premiums earned Allstate brand $ 4,839 $ 4,826 $ 4,793 $ 4,745 $ 4,667 Esurance brand 403 408 405 403 394 Encompass brand 146 151 155 158 159 5,388 5,385 5,353 5,306 5,220 Incurred losses Allstate brand $ 3,224 $ 3,416 $ 3,610 $ 3,634 $ 3,519 Esurance brand 300 310 313 308 289 Encompass brand 104 104 117 130 123 3,628 3,830 4,040 4,072 3,931 Expenses Allstate brand $ 1,161 $ 1,181 $ 1,134 $ 1,168 $ 1,103 Esurance brand 107 114 111 107 123 Encompass brand 43 44 44 45 45 1,311 1,339 1,289 1,320 1,271 Underwriting income (loss) Allstate brand $ 454 $ 229 $ 49 $ (57) $ 45 Esurance brand (4) (16) (19) (12) (18) Encompass brand (1) 3 (6) (17) (9) 449 216 24 (86) 18 Loss ratio Allstate brand 66.6 70.8 75.3 76.6 75.4 Esurance brand 74.4 76.0 77.3 76.4 73.4 Encompass brand 71.2 68.9 75.5 82.3 77.4 Allstate Protection 67.4 71.1 75.5 76.7 75.3 Expense ratio Allstate brand 24.0 24.5 23.7 24.6 23.6 Esurance brand 26.6 27.9 27.4 26.6 31.2 Encompass brand 29.5 29.1 28.4 28.5 28.3 Allstate Protection 24.3 24.9 24.1 24.9 24.4 Combined ratio Allstate brand 90.6 95.3 99.0 101.2 99.0 Esurance brand 101.0 103.9 104.7 103.0 104.6 Encompass brand 100.7 98.0 103.9 110.8 105.7 Allstate Protection 91.7 96.0 99.6 101.6 99.7 Effect of catastrophe losses on combined ratio Allstate brand 1.3 1.2 3.1 4.1 2.9 Esurance brand 1.0 1.0 2.2 2.2 0.5 Encompass brand 2.8 - 3.3 1.9 1.3 Allstate Protection 1.4 1.2 3.1 3.9 2.7 Effect of prior year reserve reestimates on combined ratio Allstate brand (1.8) (2.0) (0.1) (0.8) 0.1 Esurance brand - (2.2) (1.0) (1.0) (1.0) Encompass brand - (3.3) (1.3) 3.2 1.3 Allstate Protection (1.6) (2.1) (0.2) (0.7) 0.1 Effect of catastrophe losses included in prior year reserve reestimates on combined ratio Allstate brand (0.2) - (0.1) (0.1) (0.1) Esurance brand - - - - - Encompass brand - (0.6) - (0.6) - Allstate Protection (0.1) - (0.1) (0.1) (0.1) Effect of amortization of purchased intangible assets on combined ratio Esurance brand 0.2 0.9 1.5 1.8 1.5 Allstate Protection - - 0.1 0.1 0.1 THE ALLSTATE CORPORATION AUTO PROFITABILITY MEASURES Three months ended

 
23 March 31, Dec. 31, Sept. 30, June 30, March 31, ($ in millions) 2017 2016 2016 2016 2016 Net premiums written Allstate brand $ 1,403 $ 1,638 $ 1,869 $ 1,831 $ 1,392 Esurance brand 16 15 16 14 11 Encompass brand 91 103 121 126 104 1,510 1,756 2,006 1,971 1,507 Net premiums earned Allstate brand $ 1,688 $ 1,691 $ 1,683 $ 1,684 $ 1,678 Esurance brand 14 13 11 10 8 Encompass brand 113 115 119 121 124 1,815 1,819 1,813 1,815 1,810 Incurred losses Allstate brand $ 1,194 $ 765 $ 893 $ 1,260 $ 1,190 Esurance brand 13 8 11 10 4 Encompass brand 108 60 74 85 85 1,315 833 978 1,355 1,279 Expenses Allstate brand $ 387 $ 396 $ 384 $ 373 $ 377 Esurance brand 8 10 22 25 11 Encompass brand 33 33 34 36 36 428 439 440 434 424 Underwriting income (loss) Allstate brand $ 107 $ 530 $ 406 $ 51 $ 111 Esurance brand (7) (5) (22) (25) (7) Encompass brand (28) 22 11 - 3 72 547 395 26 107 Loss ratio Allstate brand 70.8 45.3 53.1 74.8 70.9 Esurance brand 92.9 61.6 100.0 100.0 50.0 Encompass brand 95.6 52.2 62.2 70.2 68.6 Allstate Protection 72.4 45.8 53.9 74.7 70.7 Expense ratio Allstate brand 22.9 23.4 22.8 22.2 22.5 Esurance brand 57.1 76.9 200.0 250.0 137.5 Encompass brand 29.2 28.7 28.6 29.8 29.0 Allstate Protection 23.6 24.1 24.3 23.9 23.4 Combined ratio Allstate brand 93.7 68.7 75.9 97.0 93.4 Esurance brand 150.0 138.5 300.0 350.0 187.5 Encompass brand 124.8 80.9 90.8 100.0 97.6 Allstate Protection 96.0 69.9 78.2 98.6 94.1 Effect of catastrophe losses on combined ratio Allstate brand 34.1 10.8 15.4 38.3 34.2 Esurance brand 28.6 7.7 45.5 50.0 12.5 Encompass brand 54.0 7.8 17.6 24.0 30.7 Allstate Protection 35.2 10.6 15.7 37.4 33.9 Effect of prior year reserve reestimates on combined ratio Allstate brand (1.6) (1.7) (0.3) 1.1 (0.5) Esurance brand - - - - - Encompass brand 2.7 (2.6) 1.7 - 0.8 Allstate Protection (1.3) (1.8) (0.2) 1.0 (0.4) Effect of catastrophe losses included in prior year reserve reestimates on combined ratio Allstate brand 0.1 (0.5) 0.3 1.0 (0.3) Esurance brand - - - - - Encompass brand 1.8 - 0.8 (0.8) 1.6 Allstate Protection 0.2 (0.5) 0.3 0.8 (0.2) THE ALLSTATE CORPORATION HOMEOWNERS PROFITABILITY MEASURES Three months ended

 
24 March 31, Dec. 31, Sept. 30, June 30, March 31, ($ in millions) 2017 2016 2016 2016 2016 Net premiums written Allstate brand $ 368 $ 393 $ 447 $ 428 $ 353 Esurance brand 2 2 2 2 2 Encompass brand 20 22 25 27 21 390 417 474 457 376 Net premiums earned Allstate brand $ 405 $ 403 $ 399 $ 397 $ 393 Esurance brand 2 2 2 2 2 Encompass brand 24 24 25 25 26 431 429 426 424 421 Incurred losses Allstate brand $ 265 $ 234 $ 236 $ 256 $ 261 Esurance brand 1 1 2 1 1 Encompass brand 21 13 17 16 31 287 248 255 273 293 Expenses Allstate brand $ 112 $ 117 $ 113 $ 106 $ 103 Esurance brand - 1 - 1 1 Encompass brand 7 7 8 7 7 119 125 121 114 111 Underwriting income (loss) Allstate brand $ 28 $ 52 $ 50 $ 35 $ 29 Esurance brand 1 - - - - Encompass brand (4) 4 - 2 (12) 25 56 50 37 17 Loss ratio Allstate brand 65.4 58.1 59.2 64.5 66.4 Esurance brand 50.0 50.0 100.0 50.0 50.0 Encompass brand 87.5 54.1 68.0 64.0 119.3 Allstate Protection 66.6 57.8 59.9 64.4 69.6 Expense ratio Allstate brand 27.7 29.0 28.3 26.7 26.2 Esurance brand - 50.0 - 50.0 50.0 Encompass brand 29.2 29.2 32.0 28.0 26.9 Allstate Protection 27.6 29.1 28.4 26.9 26.4 Combined ratio Allstate brand 93.1 87.1 87.5 91.2 92.6 Esurance brand 50.0 100.0 100.0 100.0 100.0 Encompass brand 116.7 83.3 100.0 92.0 146.2 Allstate Protection 94.2 86.9 88.3 91.3 96.0 Effect of catastrophe losses on combined ratio Allstate brand 14.6 9.7 6.0 15.6 16.0 Esurance brand - - - - - Encompass brand 8.3 - 4.0 8.0 3.8 Allstate Protection 14.1 9.1 5.9 15.1 15.2 Effect of prior year reserve reestimates on combined ratio Allstate brand 1.5 0.5 (0.8) (1.7) (1.5) Esurance brand - - - - - Encompass brand 12.6 (12.5) 4.0 (16.0) 42.3 Allstate Protection 2.1 (0.3) (0.5) (2.6) 1.2 Effect of catastrophe losses included in prior year reserve reestimates on combined ratio Allstate brand 1.8 (0.2) (0.3) - - Esurance brand - - - - - Encompass brand - 4.2 - - (3.9) Allstate Protection 1.6 - (0.3) - (0.3) (1) Other personal lines include renter, condominium, landlord and other personal lines products. THE ALLSTATE CORPORATION OTHER PERSONAL LINES PROFITABILITY MEASURES (1) Three months ended

 
25 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Auto Allstate brand combined ratio 90.6 95.3 99.0 101.2 99.0 Effect of catastrophe losses (1.3) (1.2) (3.1) (4.1) (2.9) Effect of prior year non-catastrophe reserve reestimates 1.6 2.0 - 0.7 (0.2) Allstate brand underlying combined ratio * 90.9 96.1 95.9 97.8 95.9 Esurance brand combined ratio 101.0 103.9 104.7 103.0 104.6 Effect of catastrophe losses (1.0) (1.0) (2.2) (2.2) (0.5) Effect of prior year non-catastrophe reserve reestimates - 2.2 1.0 1.0 1.0 Effect of amortization of purchased intangible assets (0.2) (0.9) (1.5) (1.8) (1.5) Esurance brand underlying combined ratio * 99.8 104.2 102.0 100.0 103.6 Encompass brand combined ratio 100.7 98.0 103.9 110.8 105.7 Effect of catastrophe losses (2.8) - (3.3) (1.9) (1.3) Effect of prior year non-catastrophe reserve reestimates - 2.7 1.3 (3.8) (1.3) Encompass brand underlying combined ratio * 97.9 100.7 101.9 105.1 103.1 Homeowners Allstate brand combined ratio 93.7 68.7 75.9 97.0 93.4 Effect of catastrophe losses (34.1) (10.8) (15.4) (38.3) (34.2) Effect of prior year non-catastrophe reserve reestimates 1.7 1.2 0.6 (0.1) 0.2 Allstate brand underlying combined ratio * 61.3 59.1 61.1 58.6 59.4 Esurance brand combined ratio 150.0 138.5 300.0 350.0 187.5 Effect of catastrophe losses (28.6) (7.7) (45.5) (50.0) (12.5) Effect of prior year non-catastrophe reserve reestimates - - - - - Esurance brand underlying combined ratio * 121.4 130.8 254.5 300.0 175.0 Encompass brand combined ratio 124.8 80.9 90.8 100.0 97.6 Effect of catastrophe losses (54.0) (7.8) (17.6) (24.0) (30.7) Effect of prior year non-catastrophe reserve reestimates (0.9) 2.6 (0.9) (0.8) 0.8 Encompass brand underlying combined ratio * 69.9 75.7 72.3 75.2 67.7 Other Personal Lines Allstate brand combined ratio 93.1 87.1 87.5 91.2 92.6 Effect of catastrophe losses (14.6) (9.7) (6.0) (15.6) (16.0) Effect of prior year non-catastrophe reserve reestimates 0.3 (0.7) 0.5 1.7 1.5 Allstate brand underlying combined ratio * 78.8 76.7 82.0 77.3 78.1 Esurance brand combined ratio 50.0 100.0 100.0 100.0 100.0 Effect of catastrophe losses - - - - - Effect of prior year non-catastrophe reserve reestimates - - - - - Esurance brand underlying combined ratio * 50.0 100.0 100.0 100.0 100.0 Encompass brand combined ratio 116.7 83.3 100.0 92.0 146.2 Effect of catastrophe losses (8.3) - (4.0) (8.0) (3.8) Effect of prior year non-catastrophe reserve reestimates (12.6) 16.7 (4.0) 16.0 (46.2) Encompass brand underlying combined ratio * 95.8 100.0 92.0 100.0 96.2 THE ALLSTATE CORPORATION AUTO, HOMEOWNERS AND OTHER PERSONAL LINES UNDERLYING COMBINED RATIOS Three months ended

 
26 March 31, Dec. 31, Sept. 30, June 30, March 31, ($ in millions) 2017 2016 2016 2016 2016 Net premiums written $ 123 $ 115 $ 123 $ 135 $ 126 Net premiums earned $ 125 $ 123 $ 127 $ 127 $ 129 Incurred losses $ 96 $ 109 $ 112 $ 135 $ 119 Expenses $ 33 $ 34 $ 34 $ 35 $ 38 Underwriting loss $ (4) $ (20) $ (19) $ (43) $ (28) Loss ratio 76.8 88.6 88.2 106.3 92.2 Expense ratio 26.4 27.7 26.8 27.6 29.5 Combined ratio 103.2 116.3 115.0 133.9 121.7 Effect of catastrophe losses on combined ratio 5.6 5.7 5.5 9.5 7.0 Effect of prior year reserve reestimates on combined ratio 1.6 4.9 10.3 18.1 15.5 Effect of catastrophe losses included in prior year reserve reestimates on combined ratio 0.8 0.8 - 0.8 2.4 (1) Commercial lines are all Allstate brand products. THE ALLSTATE CORPORATION COMMERCIAL LINES PROFITABILITY MEASURES (1) Three months ended

 
27 March 31, Dec. 31, Sept. 30, June 30, March 31, ($ in millions) 2017 2016 2016 2016 2016 Other Business Lines Net premiums written $ 173 $ 158 $ 185 $ 183 $ 183 Net premiums earned $ 141 $ 145 $ 150 $ 142 $ 143 Incurred losses (52) (60) (69) (64) (61) Expenses (86) (83) (74) (74) (68) Underwriting (loss) income (2) $ 3 $ 2 $ 7 $ 4 $ 14 Operating ratios Loss ratio 36.9 41.4 46.0 45.1 42.7 Expense ratio 61.0 57.2 49.3 52.1 47.5 Combined ratio 97.9 98.6 95.3 97.2 90.2 Effect of catastrophe losses on combined ratio - 0.7 - - - Effect of prior year reserve reestimates on combined ratio - 0.7 2.0 - - Effect of amortization of purchased intangible assets 0.7 0.6 0.6 0.7 0.7 Allstate Roadside Services Net premiums written $ 69 $ 67 $ 79 $ 77 $ 77 Net premiums earned $ 68 $ 74 $ 81 $ 78 $ 77 Incurred losses (31) (38) (48) (42) (40) Expenses (42) (42) (43) (38) (37) Underwriting (loss) income $ (5) $ (6) $ (10) $ (2) $ - Operating ratios Loss ratio 45.6 51.3 59.2 53.9 51.9 Expense ratio 61.8 56.8 53.1 48.7 48.1 Combined ratio 107.4 108.1 112.3 102.6 100.0 Allstate Dealer Services Net premiums written $ 104 $ 91 $ 106 $ 106 $ 106 Net premiums earned $ 73 $ 71 $ 69 $ 64 $ 66 Incurred losses (21) (22) (21) (22) (21) Expenses (55) (52) (48) (49) (43) Underwriting (loss) income $ (3) $ (3) $ - $ (7) $ 2 Operating ratios Loss ratio 28.8 31.0 30.4 34.4 31.8 Expense ratio 75.3 73.2 69.6 76.5 65.2 Combined ratio 104.1 104.2 100.0 110.9 97.0 (1) (2) Includes Ivantage underwriting gain of $11 million, $11 million, $17 million, $13 million and $12 million in the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively. THE ALLSTATE CORPORATION OTHER BUSINESS LINES PROFITABILITY MEASURES (1) Three months ended Other business lines primarily include Allstate Roadside Services, Allstate Dealer Services, Arity and Ivantage.

 
28 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Auto Annualized average premium (1) $ 989 $ 978 $ 966 $ 946 $ 927 Underlying combined ratio * 90.9 96.1 95.9 97.8 95.9 Average underlying loss (incurred pure premium) and expense * $ 899 $ 940 $ 926 $ 925 $ 889 Homeowners Annualized average premium $ 1,112 $ 1,109 $ 1,102 $ 1,098 $ 1,091 Underlying combined ratio * 61.3 59.1 61.1 58.6 59.4 Average underlying loss (incurred pure premium) and expense * $ 682 $ 655 $ 673 $ 643 $ 648 (1) THE ALLSTATE CORPORATION Calculated by annualizing net earned premium reported in the quarter divided by policies in force at quarter end. ALLSTATE BRAND AUTO AND HOMEOWNERS UNDERLYING LOSS AND EXPENSE Three months ended

 
29 Annual impact of Effect of rate changes Earned Incurred Catastrophe catastrophes Number of Number of on state specific Primary Exposure Groupings (1) premiums losses Loss ratios losses on loss ratio catastrophes locations premiums written Florida $ 26 $ 16 61.5% $ 3 11.5% Other hurricane exposure locations 983 822 83.6% 467 47.5% Total hurricane exposure locations (2) 1,009 838 83.1% 470 46.6% 7 4.0% Other catastrophe exposure locations (4) 806 477 59.2% 170 21.1% 7 5.0% Total $ 1,815 $ 1,315 72.4% $ 640 35.2% 28 14 4.2% (1) Basis of Presentation (2) (3) (4) Includes Canada. THE ALLSTATE CORPORATION HOMEOWNERS SUPPLEMENTAL INFORMATION ($ in millions) Represents the impact in the locations where rate changes were approved during the year as a percentage of total prior year-end premiums written in those locations. This homeowners supplemental information schedule displays financial results for the homeowners business (defined to include standard homeowners, scheduled personal property and other than primary residence lines). Each state in which the Company writes business has been categorized into one of two exposure groupings (Hurricane or Other). Hurricane exposure states are comprised of those states in which hurricanes are the primary catastrophe exposure. However, the catastrophe losses for these states include losses due to other kinds of catastrophes. A catastrophe is defined by Allstate as an event that produces pre-tax losses before reinsurance in excess of $1 million and involves multiple first party policyholders, or a winter weather event that produces a number of claims in excess of a preset, per-event threshold of average claims in a specific area, occurring within a certain amount of time following the event. Premium rate changes (3) Hurricane exposure states include the following coastal locations: Alabama, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington, D.C. Three months ended March 31, 2017

 
30 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Allstate brand Auto $ 65 $ 59 $ 150 $ 195 $ 137 Homeowners 575 183 259 644 574 Other personal lines 59 39 24 62 63 Commercial lines 7 7 7 12 9 Other business lines - 1 - - - Total 706 289 440 913 783 Esurance brand Auto 4 4 9 9 2 Homeowners 4 1 5 5 1 Other personal lines - - - - - Total 8 5 14 14 3 Encompass brand Auto 4 - 5 3 2 Homeowners 61 9 21 29 38 Other personal lines 2 - 1 2 1 Total 67 9 27 34 41 Allstate Protection $ 781 $ 303 $ 481 $ 961 $ 827 Allstate Protection Auto $ 73 $ 63 $ 164 $ 207 $ 141 Homeowners 640 193 285 678 613 Other personal lines 61 39 25 64 64 Commercial lines 7 7 7 12 9 Other business lines - 1 - - - $ 781 $ 303 $ 481 $ 961 $ 827 THE ALLSTATE CORPORATION CATASTROPHE LOSSES BY BRAND ($ in millions) Three months ended

 
31 Average Number Claims and Combined catastrophe Size of catastrophe of events claims expense ratio impact loss per event Greater than $250 million 1 3.6 % $ 267 34.2 % 3.4 267 $101 million to $250 million - - - - - - $50 million to $100 million 3 10.7 230 29.4 2.9 77 Less than $50 million 24 85.7 280 35.9 3.5 12 Total 28 100.0 % 777 99.5 9.8 28 Prior year reserve reestimates 4 0.5 - Total catastrophe losses $ 781 100.0 % 9.8 Premiums Total Total Effect on the earned catastrophe catastrophe Property-Liability Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year year-to-date losses by year losses by year combined ratio 2008 8.4 10.3 26.8 3.9 12.4 $ 26,967 $ 3,342 $ 1,876 7.0 2009 7.8 12.5 6.2 5.0 7.9 26,194 2,069 2,159 8.2 2010 10.0 9.8 5.9 8.3 8.5 25,957 2,207 2,272 8.8 2011 5.2 36.2 16.7 1.0 14.7 25,942 3,815 3,298 12.7 2012 3.9 12.3 3.1 15.7 8.8 26,737 2,345 1,324 5.0 2013 5.3 9.4 1.8 1.7 4.5 27,618 1,251 1,352 4.9 2014 6.3 13.0 7.1 1.3 6.9 28,929 1,993 2,000 6.9 2015 4.0 10.6 3.5 4.7 5.7 30,309 1,719 1,749 5.8 2016 10.7 12.3 6.1 3.8 8.2 31,307 2,572 2,419 7.7 2017 9.8 7,959 781 775 9.7 Average 7.1 14.0 8.6 5.0 8.6 7.7 combined ratio Three months ended March 31, 2017 EFFECT OF CATASTROPHE LOSSES ON THE COMBINED RATIO Excludes the effect of catastrophe losses relating to earthquakes and hurricanes Effect of all catastrophe losses on the Property-Liability ($ in millions) THE ALLSTATE CORPORATION PROPERTY-LIABILITY CATASTROPHE EXPERIENCE CATASTROPHE BY SIZE OF EVENT

 
32 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Prior Year Reserve Reestimates (1) Auto $ (86) $ (114) $ (10) $ (36) $ 5 Homeowners (24) (32) (4) 19 (7) Other personal lines 9 (1) (2) (11) 5 Commercial lines 2 6 13 23 20 Other business lines - 1 3 - - Allstate Protection (99) (140) - (5) 23 Discontinued Lines and Coverages 2 3 99 2 1 Property-Liability $ (97) $ (137) $ 99 $ (3) $ 24 Allstate brand (2) $ (105) $ (120) $ 3 $ (2) $ 13 Esurance brand (2) - (9) (4) (4) (4) Encompass brand (2) 6 (11) 1 1 14 Allstate Protection (2) $ (99) $ (140) $ - $ (5) $ 23 Effect of Prior Year Reserve Reestimates on Combined Ratio (1)(3) Auto (1.0) (1.4) (0.1) (0.5) - Homeowners (0.3) (0.4) (0.1) 0.3 (0.1) Other personal lines 0.1 - - (0.1) - Commercial lines - 0.1 0.2 0.3 0.3 Other business lines - - - - - Allstate Protection (1.2) (1.7) - - 0.2 Discontinued Lines and Coverages - - 1.3 - 0.1 Property-Liability (1.2) (1.7) 1.3 - 0.3 Allstate brand (2) (1.3) (1.5) - - 0.1 Esurance brand (2) - (0.1) - - (0.1) Encompass brand (2) 0.1 (0.1) - - 0.2 Allstate Protection (2) (1.2) (1.7) - - 0.2 (1) (2) (3) Calculated using Property-Liability premiums earned for the respective period. THE ALLSTATE CORPORATION PROPERTY-LIABILITY PRIOR YEAR RESERVE REESTIMATES ($ in millions) Favorable reserve reestimates are shown in parentheses. (Favorable) unfavorable reserve reestimates included in catastrophe losses for Allstate brand, Esurance brand, Encompass brand and Allstate Protection totaled $2 million, $0 million, $2 million and $4 million, and $(4) million, $0 million, $1 million and $(3) million, respectively, in the three months ended March 31, 2017 and 2016, respectively. Three months ended

 
33 2016 2015 2014 2013 2012 (net of reinsurance) Asbestos claims (1) Beginning reserves $ 912 $ 960 $ 1,014 $ 1,017 $ 1,026 $ 1,078 Incurred claims and claims expense - 67 39 87 74 26 Claims and claims expense paid (21) (115) (93) (90) (83) (78) Ending reserves $ 891 $ 912 $ 960 $ 1,014 $ 1,017 $ 1,026 Claims and claims expense paid as a percent of ending reserves 2.4% 12.6% 9.7% 8.9% 8.2% 7.6% Environmental claims (1) Beginning reserves $ 179 $ 179 $ 203 $ 208 $ 193 $ 185 Incurred claims and claims expense - 23 1 15 30 22 Claims and claims expense paid (1) (23) (25) (20) (15) (14) Ending reserves $ 178 $ 179 $ 179 $ 203 $ 208 $ 193 Claims and claims expense paid as a percent of ending reserves 0.6% 12.8% 14.0% 9.9% 7.2% 7.3% (1) The 3-year survival ratio for the combined environmental and asbestos claims was 9.2, 8.9, 10.4, 12.2, 14.4 and 14.3 for annual three-months of 2017 and year- end 2016, 2015, 2014, 2013 and 2012, respectively, and is calculated by taking the ending reserves divided by net payments made during the year. THE ALLSTATE CORPORATION ASBESTOS AND ENVIRONMENTAL RESERVES ($ in millions) Twelve months ended December 31, Three months ended March 31, 2017

 
34 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Premiums $ 381 $ 364 $ 361 $ 353 $ 354 Contract charges 212 210 210 211 212 Net investment income 426 453 427 435 419 Contract benefits (474) (464) (484) (454) (455) Interest credited to contractholder funds (173) (177) (183) (179) (184) Amortization of deferred policy acquisition costs (75) (70) (68) (68) (71) Operating costs and expenses (135) (127) (126) (121) (123) Restructuring and related charges - - - (1) - Income tax expense on operations (52) (59) (43) (56) (48) Operating income 110 130 94 120 104 Realized capital gains and losses, after-tax (1) (8) (14) - (32) Valuation changes on embedded derivatives that are not hedged, after-tax - 6 - (4) (4) DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax (3) (1) (1) (1) (1) Gain on disposition of operations, after-tax 2 - 1 1 1 Net income applicable to common shareholders $ 108 $ 127 $ 80 $ 116 $ 68 THE ALLSTATE CORPORATION ALLSTATE FINANCIAL SEGMENT RESULTS ($ in millions) Three months ended

 
35 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Return on Attributed Equity Numerator: Net income applicable to common shareholders (1) $ 431 $ 391 $ 303 $ 485 $ 548 Denominator: Beginning attributed equity (2) $ 7,680 $ 7,350 $ 7,475 $ 7,621 $ 7,920 Ending attributed equity 7,778 7,904 8,205 8,055 7,680 Average attributed equity (3) $ 7,729 $ 7,627 $ 7,840 $ 7,838 $ 7,800 Return on attributed equity 5.6 % 5.1 % 3.9 % 6.2 % 7.0 % Operating Income Return on Attributed Equity Numerator: Operating income (1) $ 454 $ 448 $ 416 $ 460 $ 479 Denominator: Beginning attributed equity $ 7,680 $ 7,350 $ 7,475 $ 7,621 $ 7,920 Unrealized net capital gains and losses 824 556 722 1,030 1,499 Adjusted beginning attributed equity 6,856 6,794 6,753 6,591 6,421 Ending attributed equity 7,778 7,904 8,205 8,055 7,680 Unrealized net capital gains and losses 790 721 1,150 1,077 824 Adjusted ending attributed equity 6,988 7,183 7,055 6,978 6,856 Average adjusted attributed equity (3) $ 6,922 $ 6,989 $ 6,904 $ 6,785 $ 6,639 Operating income return on attributed equity 6.6 % 6.4 % 6.0 % 6.8 % 7.2 % (1) (2) (3) Allstate Financial attributed equity is the sum of equity for Allstate Life Insurance Company and the applicable equity for Allstate Financial Insurance Holdings Corporation. Average attributed equity and average adjusted attributed equity are determined using a two-point average, with the beginning and ending attributed equity and adjusted attributed equity, respectively, for the twelve-month period as data points. THE ALLSTATE CORPORATION ALLSTATE FINANCIAL RETURN ON ATTRIBUTED EQUITY ($ in millions) Net income applicable to common shareholders and operating income reflect a trailing twelve-month period. Twelve months ended

 
36 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 PREMIUMS AND CONTRACT CHARGES - BY PRODUCT Underwritten Products Traditional life insurance premiums $ 149 $ 151 $ 145 $ 139 $ 138 Accident and health insurance premiums 232 213 216 214 216 Interest-sensitive life insurance contract charges 209 206 206 208 209 590 570 567 561 563 Annuities Fixed annuity contract charges 3 4 4 3 3 Total $ 593 $ 574 $ 571 $ 564 $ 566 PREMIUMS AND CONTRACT CHARGES - BY DISTRIBUTION CHANNEL Allstate agencies $ 315 $ 312 $ 308 $ 306 $ 305 Workplace enrolling agents 250 236 238 232 233 Other (1) 28 26 25 26 28 Total $ 593 $ 574 $ 571 $ 564 $ 566 PROPRIETARY LIFE INSURANCE POLICIES SOLD BY ALLSTATE AGENCIES (2) 25,970 38,614 27,481 29,839 25,458 ALLSTATE BENEFITS NEW BUSINESS WRITTEN PREMIUMS (3) $ 107 $ 177 $ 69 $ 70 $ 82 (1) Primarily represents independent master brokerage agencies. (2) Policies sold reduced by lapses within twelve months of sale. (3) New business written premiums reflect annualized premiums at initial customer enrollment (including new accounts and new employees or policies of existing accounts), reduced by an estimate for certain policies that are expected to lapse. A significant portion of Allstate Benefits business is seasonally written in the fourth quarter during many clients’ annual employee benefits enrollment. THE ALLSTATE CORPORATION ALLSTATE FINANCIAL PREMIUMS AND CONTRACT CHARGES ($ in millions) Three months ended

 
37 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Contractholders funds, beginning balance $ 20,260 $ 20,583 $ 20,845 $ 21,092 $ 21,295 Deposits Interest-sensitive life insurance 249 248 251 251 252 Fixed annuities 45 38 40 40 44 Total deposits 294 286 291 291 296 Interest credited 173 168 181 184 189 Benefits, withdrawals, maturities and other adjustments Benefits (233) (231) (258) (225) (252) Surrenders and partial withdrawals (253) (237) (271) (300) (245) Maturities of and interest payments on institutional products - (86) - - - Contract charges (206) (209) (208) (206) (206) Net transfers from separate accounts 2 1 2 1 1 Other adjustments 14 (15) 1 8 14 Total benefits, withdrawals, maturities and other adjustments (676) (777) (734) (722) (688) Contractholder funds, ending balance $ 20,051 $ 20,260 $ 20,583 $ 20,845 $ 21,092 THE ALLSTATE CORPORATION ALLSTATE FINANCIAL CHANGE IN CONTRACTHOLDER FUNDS ($ in millions) Three months ended

 
38 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Benefit spread Premiums $ 381 $ 364 $ 361 $ 353 $ 354 Cost of insurance contract charges (1) 141 139 136 140 141 Contract benefits excluding the implied interest on immediate annuities with life contingencies (2) (348) (336) (358) (325) (327) Total benefit spread 174 167 139 168 168 Investment spread Net investment income 426 453 427 435 419 Implied interest on immediate annuities with life contingencies (2) (126) (128) (126) (129) (128) Interest credited to contractholder funds (173) (168) (183) (185) (190) Total investment spread 127 157 118 121 101 Surrender charges and contract maintenance expense fees (1) 71 71 74 71 71 Realized capital gains and losses (1) (11) (21) - (49) Amortization of deferred policy acquisition costs (79) (71) (70) (69) (73) Operating costs and expenses (135) (127) (126) (121) (123) Restructuring and related charges - - - (1) - Gain on disposition of operations 2 1 1 1 2 Income tax expense (51) (60) (35) (54) (29) Net income applicable to common shareholders $ 108 $ 127 $ 80 $ 116 $ 68 Benefit spread by product group Life insurance $ 76 $ 78 $ 64 $ 85 $ 80 Accident and health insurance 113 105 103 108 105 Annuities (15) (16) (28) (25) (17) Total benefit spread $ 174 $ 167 $ 139 $ 168 $ 168 Investment spread by product group Life insurance $ 32 $ 33 $ 30 $ 29 $ 34 Accident and health insurance 4 4 4 4 4 Annuities and institutional products 28 51 25 35 17 Net investment income on investments supporting capital 63 60 59 59 52 Investment spread before valuation changes on embedded derivatives that are not hedged 127 148 118 127 107 Valuation changes on derivatives embedded in equity- indexed annuity contracts that are not hedged - 9 - (6) (6) Total investment spread $ 127 $ 157 $ 118 $ 121 $ 101 (1) Reconciliation of contract charges Cost of insurance contract charges $ 141 $ 139 $ 136 $ 140 $ 141 Surrender charges and contract maintenance expense fees 71 71 74 71 71 Total contract charges $ 212 $ 210 $ 210 $ 211 $ 212 (2) Reconciliation of contract benefits Contract benefits excluding the implied interest on immediate annuities with life contingencies $ (348) $ (336) $ (358) $ (325) $ (327) Implied interest on immediate annuities with life contingencies (126) (128) (126) (129) (128) Total contract benefits $ (474) $ (464) $ (484) $ (454) $ (455) THE ALLSTATE CORPORATION ALLSTATE FINANCIAL ANALYSIS OF NET INCOME ($ in millions) Three months ended

 
39 Weighted average Weighted average Weighted average Weighted average Weighted average Weighted average investment yield interest crediting rate investment spreads investment yield interest crediting rate investment spreads Interest-sensitive life insurance 5.0 % 3.8 % 1.2 % 5.0 % 3.9 % 1.1 % Deferred fixed annuities and institutional products 4.4 2.8 1.6 4.0 2.8 1.2 Immediate fixed annuities with and without life contingencies 6.3 5.9 0.4 6.0 5.9 0.1 Investments supporting capital, traditional life and other products 3.9 n/a n/a 3.8 n/a n/a THE ALLSTATE CORPORATION ALLSTATE FINANCIAL WEIGHTED AVERAGE INVESTMENT SPREADS Three months ended March 31, 2017 Three months ended March 31, 2016

 
40 Twelve months ended March 31, 2017 Attributed equity Reserves and excluding unrealized March Dec. Sept. June March Contractholder funds capital gains/losses (3)(4) Operating income (5) 2017 2016 2016 2016 2016 Underwritten products Life insurance $ 10,891 $ 2,413 $ 254 10.4 % 9.9 % 10.1 % 10.8 % 11.1 % Accident and health insurance 876 684 85 12.8 13.2 12.8 12.4 12.2 Subtotal 11,767 3,097 339 11.0 10.6 10.6 11.1 11.3 Immediate Annuities: Sub-standard structured settlements and group pension terminations (1) 5,033 2,055 (14) (0.8) (0.8) (1.7) (0.9) (0.2) Standard structured settlements and SPIA (2) 6,534 1,222 62 4.9 4.3 2.2 4.1 4.9 Subtotal (6) 11,567 3,277 48 1.5 1.2 (0.1) 1.1 2.0 Deferred Annuities 8,940 614 66 10.3 9.7 9.6 10.0 10.4 Institutional products - - 1 Subtotal 20,507 3,891 115 2.9 2.7 1.8 2.9 3.7 Total Allstate Financial $ 32,274 $ 6,988 $ 454 6.6 6.4 6.0 6.8 7.2 Life Accident and Annuities and Allstate insurance health insurance institutional products Financial Operating income $ 62 $ 19 $ 29 $ 110 Realized capital gains and losses, after-tax 1 - (2) (1) Valuation changes on embedded derivatives that are not hedged, after-tax - - - - DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax (3) - - (3) Gain on disposition of operations, after-tax - - 2 2 Net income applicable to common shareholders $ 60 $ 19 $ 29 $ 108 (1) (2) (3) (4) (5) (6) THE ALLSTATE CORPORATION ALLSTATE FINANCIAL SUPPLEMENTAL PRODUCT INFORMATION ($ in millions) As of March 31, 2017 Three months ended March 31, 2017 Annuities and institutional products: Twelve months ended Operating income return on attributed equity (%) Structured settlement annuities for annuitants with severe injuries or other health impairments which significantly reduced their life expectancy at the time the annuity was issued and group annuity contracts issued to sponsors of terminated pension plans. Of the total immediate annuities, $8,594 are reported in reserve for life-contingent contract benefits and $2,973 are reported in contractholder funds. Product line operating income includes allocation of income on investments supporting capital. Operating income reflects a trailing twelve-month period. Life-contingent structured settlement annuities for annuitants with standard life expectancy, period certain structured settlements and single premium immediate annuities with and without life contingencies. Total Allstate Financial attributed equity is the sum of equity for Allstate Life Insurance Company and the applicable equity for Allstate Financial Insurance Holdings Corporation, excluding unrealized capital gains and losses. Attributed equity is allocated to each product line based on statutory capital adjusted for GAAP reporting differences and the amount of capital held in Allstate Financial may vary from economic capital. The calculation of statutory capital by product incorporates internal factors for invested asset risk, insurance risk (mortality and morbidity), interest rate risk and business risk. Due to the unavailability of final statutory financial statements at the time we release our GAAP financial results, the allocation is derived from prior quarter statutory capital. Statutory capital is adjusted for appropriate GAAP accounting differences. Changes in internal capital factors, investment portfolio mix and risk as well as changes in GAAP and statutory reporting differences will result in changes to the allocation of attributed equity to products.

 
41 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 ALLSTATE FINANCIAL INSURANCE POLICIES AND ANNUITIES IN FORCE BY PRODUCT Underwritten products Life insurance 2,474 2,476 2,475 2,478 2,467 Accident and health insurance 3,533 3,300 3,275 3,294 3,278 6,007 5,776 5,750 5,772 5,745 Annuities Deferred annuities 152 156 160 163 168 Immediate annuities 96 97 98 100 101 248 253 258 263 269 Total 6,255 6,029 6,008 6,035 6,014 ALLSTATE FINANCIAL INSURANCE POLICIES AND ANNUITIES IN FORCE BY SOURCE OF BUSINESS Allstate Agencies (2) 1,925 1,928 1,924 1,924 1,922 Allstate Benefits 3,995 3,758 3,736 3,755 3,729 Other (3) 335 343 348 356 363 Total 6,255 6,029 6,008 6,035 6,014 (1) (2) (3) Primarily business sold by banks/broker-dealers, independent master brokerage agencies and specialized structured settlement brokers. Excludes Allstate Benefits products sold through Allstate Agencies, which are included in the Allstate Benefits line. Allstate Financial insurance policies and annuities in force reflect the number of contracts in force excluding sold blocks of business that remain on the balance sheet due to the dispositions of the business being effected through reinsurance arrangements. Policy counts associated with our voluntary employee benefits group business reflect certificate counts as opposed to group counts. THE ALLSTATE CORPORATION ALLSTATE FINANCIAL INSURANCE POLICIES AND ANNUITIES IN FORCE (1) (in thousands)

 
42 Allstate Allstate Allstate Allstate Allstate Financial Allstate Allstate Allstate Financial Life Benefits Annuities Segment Life Benefits Annuities Segment $ 140 $ 241 $ - $ 381 $ 130 $ 224 $ - $ 354 181 28 3 212 182 27 3 212 120 17 289 426 120 18 281 419 (195) (136) (143) (474) (180) (128) (147) (455) (69) (9) (95) (173) (70) (9) (105) (184) Amortization of deferred policy acquisition costs (32) (41) (2) (75) (31) (38) (2) (71) (59) (67) (9) (135) (56) (59) (8) (123) (27) (11) (14) (52) (29) (12) (7) (48) 59 22 29 110 66 23 15 104 1 - (2) (1) (8) (3) (21) (32) - - - - - - (4) (4) (3) - - (3) (1) - - (1) Gain on disposition of operations, after-tax - - 2 2 - - 1 1 $ 57 $ 22 $ 29 $ 108 $ 57 $ 20 $ (9) $ 68 Premiums and Contract Charges - by Product Underwritten Products $ 140 $ 9 $ - $ 149 $ 130 $ 8 $ - $ 138 - 232 - 232 - 216 - 216 181 28 - 209 182 27 - 209 321 269 - 590 312 251 - 563 - - 3 3 - - 3 3 $ 321 $ 269 $ 3 $ 593 $ 312 $ 251 $ 3 $ 566 Life Insurance $ 71 $ 5 $ - $ 76 $ 75 $ 5 $ - $ 80 Accident and health insurance (2) 115 - 113 - 105 - 105 Annuities - - (15) (15) - - (17) (17) $ 69 $ 120 $ (15) $ 174 $ 75 $ 110 $ (17) $ 168 Life insurance $ 29 $ 3 $ - $ 32 $ 32 $ 2 $ - $ 34 Accident and health insurance 2 2 - 4 1 3 - 4 Annuities and institutional products - - 28 28 - - 17 17 Net investment income on investments supporting capital 20 3 40 63 17 4 31 52 derivatives that are not hedged 51 8 68 127 50 9 48 107 Valuation changes on derivatives embedded in equity- indexed annuity contracts that are not hedged - - - - - - (6) (6) Total investment spread $ 51 $ 8 $ 68 $ 127 $ 50 $ 9 $ 42 $ 101 Premiums THE ALLSTATE CORPORATION ALLSTATE LIFE, ALLSTATE ANNUITIES AND ALLSTATE BENEFITS RESULTS AND PRODUCT INFORMATION ($ in millions) For the three months ended March 31, 2017 For the three months ended March 31, 2016 Valuation changes on embedded derivatives Contract charges Net investment income Contract benefits Interest credited to contractholder funds Operating costs and expenses Income tax expense on operations Operating income Realized capital gains and losses, after-tax Annuities that are not hedged, after-tax DAC and DSI amortization relating to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged, after-tax Net income applicable to common shareholders Traditional life insurance premiums Accident and health insurance Interest-sensitive life insurance contract charges Investment Spread by Product Group Investment spread before valuation changes on embedded Fixed annuity contract charges Total life and annuity premiums and contract charges Benefit Spread by Product Group Total benefit spread

 
43 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Net investment income $ 11 $ 10 $ 11 $ 11 $ 10 Operating costs and expenses (8) (9) (7) (7) (6) Interest expense (85) (77) (73) (72) (73) Income tax benefit on operations 30 29 26 26 25 Preferred stock dividends (29) (29) (29) (29) (29) Operating loss (81) (76) (72) (71) (73) Realized capital gains and losses, after-tax - (1) - (1) - Business combination expenses, after-tax (1) (13) - - - - Net loss applicable to common shareholders $ (94) $ (77) $ (72) $ (72) $ (73) (1) Relates to SquareTrade acquisition on January 3, 2017. THE ALLSTATE CORPORATION CORPORATE AND OTHER SEGMENT RESULTS ($ in millions) Three months ended

 
44 March 31, Dec. 31, Sept. 30, June 30, March 31, March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 2017 2016 2016 2016 2016 Fixed income securities, at fair value: Tax-exempt $ 4,623 $ 4,447 $ 4,798 $ 4,612 $ 4,466 $ - $ - $ 1 $ 2 $ 2 Taxable 26,754 25,855 26,968 25,139 24,615 25,072 25,578 26,225 26,169 25,858 Equity securities, at fair value (1) 4,012 4,074 3,604 3,632 3,709 1,670 1,589 1,681 1,630 1,405 Mortgage loans 279 280 270 313 294 4,070 4,206 4,126 4,140 4,008 Limited partnership interests (2) 3,122 3,042 2,913 2,842 2,688 2,860 2,771 2,674 2,564 2,399 Short-term, at fair value 1,592 3,405 917 1,619 1,452 818 609 733 1,197 1,626 Other 1,618 1,619 1,587 1,532 1,512 2,120 2,087 2,076 2,058 2,038 Total $ 42,000 $ 42,722 $ 41,057 $ 39,689 $ 38,736 $ 36,610 $ 36,840 $ 37,516 $ 37,760 $ 37,336 Fixed income securities, amortized cost: Tax-exempt $ 4,635 $ 4,498 $ 4,726 $ 4,509 $ 4,384 $ 1 $ - $ 1 $ 2 $ 2 Taxable 26,529 25,706 26,447 24,746 24,454 23,860 24,424 24,330 24,357 24,481 Ratio of fair value to amortized cost 100.7% 100.3% 101.9% 101.7% 100.8% 105.1% 104.7% 107.8% 107.4% 105.6% Equity securities, cost $ 3,526 $ 3,671 $ 3,212 $ 3,337 $ 3,417 $ 1,497 $ 1,483 $ 1,585 $ 1,584 $ 1,372 Short-term, amortized cost 1,592 3,405 917 1,619 1,452 818 609 733 1,197 1,626 March 31, Dec. 31, Sept. 30, June 30, March 31, March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 2017 2016 2016 2016 2016 Fixed income securities, at fair value: Tax-exempt $ 541 $ 535 $ 600 $ 609 $ 591 $ 5,164 $ 4,982 $ 5,399 $ 5,223 $ 5,059 Taxable 1,646 1,424 1,714 1,598 1,759 53,472 52,857 54,907 52,906 52,232 Equity securities, at fair value 3 3 3 3 3 5,685 5,666 5,288 5,265 5,117 Mortgage loans - - - - - 4,349 4,486 4,396 4,453 4,302 Limited partnership interests - 1 1 1 4 5,982 5,814 5,588 5,407 5,091 Short-term, at fair value 343 274 213 34 448 2,753 4,288 1,863 2,850 3,526 Other - - - - - 3,738 3,706 3,663 3,590 3,550 Total $ 2,533 $ 2,237 $ 2,531 $ 2,245 $ 2,805 $ 81,143 $ 81,799 $ 81,104 $ 79,694 $ 78,877 Fixed income securities, amortized cost: Tax-exempt $ 529 $ 527 $ 580 $ 585 $ 569 $ 5,165 $ 5,025 $ 5,307 $ 5,096 $ 4,955 Taxable 1,640 1,421 1,691 1,571 1,737 52,029 51,551 52,468 50,674 50,672 Ratio of fair value to amortized cost 100.8% 100.6% 101.9% 102.4% 101.9% 102.5% 102.2% 104.4% 104.2% 103.0% Equity securities, cost $ 3 $ 3 $ 3 $ 3 $ 3 $ 5,026 $ 5,157 $ 4,800 $ 4,924 $ 4,792 Short-term, amortized cost 343 274 213 34 448 2,753 4,288 1,863 2,850 3,526 (1) (2) As of March 31, 2017, we have commitments to invest in additional limited partnership interests totaling $1.54 billion, $1.43 billion and $2.97 billion for Property-Liability, Allstate Financial, and in Total, respectively. Equity securities may include investments in exchange traded and mutual funds whose underlying investments are fixed income securities. THE ALLSTATE CORPORATION INVESTMENTS ($ in millions) PROPERTY-LIABILITY ALLSTATE FINANCIAL CORPORATE AND OTHER CONSOLIDATED

 
45 Unrealized net Fair value Unrealized net Fair value Unrealized net Fair value capital gains Fair as a percent of capital gains Fair as a percent of capital gains Fair as a percent of and losses value amortized cost (1) and losses value amortized cost (1) and losses value amortized cost (1) Fixed income securities U.S. government and agencies $ 66 $ 4,395 101.5 $ 65 $ 3,637 101.8 $ 105 $ 4,304 102.5 Municipal 258 7,507 103.6 217 7,333 103.0 470 7,902 106.3 Corporate 992 43,535 102.3 859 43,601 102.0 1,804 44,474 104.2 Foreign government 32 1,027 103.2 32 1,075 103.1 59 1,119 105.6 Asset-backed securities ("ABS") 3 1,265 100.2 2 1,171 100.2 (3) 1,390 99.8 Residential mortgage-backed securities ("RMBS") 83 672 114.1 77 728 111.8 82 778 111.8 Commercial mortgage-backed securities ("CMBS") 5 211 102.4 8 270 103.1 11 315 103.6 Redeemable preferred stock 3 24 114.3 3 24 114.3 3 24 114.3 Total fixed income securities 1,442 58,636 102.5 1,263 57,839 102.2 2,531 60,306 104.4 Equity securities 659 5,685 113.1 509 5,666 109.9 488 5,288 110.2 Short-term investments - 2,753 100.0 - 4,288 100.0 - 1,863 100.0 Derivatives - 108 n/a 2 111 n/a 1 85 n/a EMA limited partnership interests (2) - n/a n/a (4) n/a n/a (5) n/a n/a Unrealized net capital gains and losses, pre-tax 2,101 1,770 3,015 Amounts recognized for: Insurance reserves (3) - - - DAC and DSI (4) (165) (146) (216) Amounts recognized (165) (146) (216) Deferred income taxes (680) (571) (982) Unrealized net capital gains and losses, after-tax $ 1,256 $ 1,053 $ 1,817 Unrealized net Fair value Unrealized net Fair value Unrealized net Fair value capital gains Fair as a percent of capital gains Fair as a percent of capital gains Fair as a percent of and losses value amortized cost (1) and losses value amortized cost (1) and losses value amortized cost (1) Fixed income securities U.S. government and agencies $ 122 $ 3,523 103.6 $ 114 $ 3,504 103.4 $ 86 $ 3,922 102.2 Municipal 532 7,818 107.3 442 7,616 106.2 369 7,401 105.2 Corporate 1,566 42,700 103.8 989 41,272 102.5 153 41,827 100.4 Foreign government 61 1,152 105.6 55 1,054 105.5 50 1,033 105.1 ABS (11) 1,726 99.4 (27) 2,499 98.9 (32) 2,327 98.6 RMBS 70 818 109.4 68 875 108.4 90 947 110.5 CMBS 16 368 104.5 20 447 104.7 28 466 106.4 Redeemable preferred stock 3 24 114.3 3 24 114.3 3 25 113.6 Total fixed income securities 2,359 58,129 104.2 1,664 57,291 103.0 747 57,948 101.3 Equity securities 341 5,265 106.9 325 5,117 106.8 276 5,082 105.7 Short-term investments - 2,850 100.0 - 3,526 100.0 - 2,122 100.0 Derivatives 2 71 n/a 4 58 n/a 6 53 n/a EMA limited partnership interests (2) (5) n/a n/a (5) n/a n/a (4) n/a n/a Unrealized net capital gains and losses, pre-tax 2,697 1,988 1,025 Amounts recognized for: Insurance reserves (3) - - - DAC and DSI (4) (195) (138) (67) Amounts recognized (195) (138) (67) Deferred income taxes (878) (650) (338) Unrealized net capital gains and losses, after-tax $ 1,624 $ 1,200 $ 620 (1) (2) (3) (4) The DAC and DSI adjustment balance represents the amount by which the amortization of DAC and DSI would increase or decrease if the unrealized gains or losses in the respective product portfolios were realized. The comparison of percentages from period to period may be distorted by investment transactions such as sales, purchases and impairment write-downs. Unrealized net capital gains and losses for limited partnership interests represent the Company's share of EMA limited partnerships' other comprehensive income. Fair value and amortized cost are not applicable. The insurance reserves adjustment represents the amount by which the reserve balance would increase if the net unrealized gains in the applicable product portfolios were realized and reinvested at current lower interest rates, resulting in a premium deficiency. Although we evaluate premium deficiencies on the combined performance of our life insurance and immediate annuities with life contingencies, the adjustment primarily relates to structured settlement annuities with life contingencies, in addition to annuity buy-outs and certain payout annuities with life contingencies. June 30, 2016 March 31, 2016 December 31, 2015 THE ALLSTATE CORPORATION UNREALIZED NET CAPITAL GAINS AND LOSSES ON SECURITY PORTFOLIO BY TYPE ($ in millions) March 31, 2017 December 31, 2016 September 30, 2016

 
46 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 NET INVESTMENT INCOME Fixed income securities $ 518 $ 514 $ 508 $ 520 $ 518 Equity securities 44 34 31 44 28 Mortgage loans 55 55 56 53 53 Limited partnership interests ("LP") 120 178 136 126 121 Short-term 6 5 4 3 4 Other 56 59 55 57 51 Investment income, before expense 799 845 790 803 775 Less: Investment expense (51) (44) (42) (41) (44) Net investment income $ 748 $ 801 $ 748 $ 762 $ 731 Interest-bearing investments (1) $ 625 $ 622 $ 613 $ 623 $ 618 Equity securities 44 34 31 44 28 LP and other alternative investments (2) 130 189 146 136 129 Investment income, before expense $ 799 $ 845 $ 790 $ 803 $ 775 PRE-TAX YIELDS (3) Fixed income securities 3.6 % 3.6 % 3.6 % 3.7 % 3.7 % Equity securities 3.5 2.7 2.5 3.7 2.3 Mortgage loans 4.9 5.0 5.0 4.9 4.9 Limited partnership interests 8.1 12.5 9.9 9.6 9.7 Total portfolio 4.0 4.2 4.0 4.1 4.0 Interest-bearing investments 3.7 3.7 3.7 3.8 3.7 REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE Impairment write-downs $ (43) $ (49) $ (63) $ (63) $ (59) Change in intent write-downs (16) (21) (10) (16) (22) Net other-than-temporary impairment losses recognized in earnings (59) (70) (73) (79) (81) Sales and other 208 47 121 104 (59) Valuation and settlements of derivative instruments (15) 25 (15) (1) (9) Total $ 134 $ 2 $ 33 $ 24 $ (149) TOTAL RETURN ON INVESTMENT PORTFOLIO (4) Income 0.9 % 1.0 % 0.9 % 1.0 % 0.9 % Valuation 0.7 (1.7) 0.4 0.9 1.1 Total 1.6 % (0.7) % 1.3 % 1.9 % 2.0 % AVERAGE INVESTMENT BALANCES (in billions) (5) $ 79.5 $ 79.1 $ 77.5 $ 76.9 $ 76.8 (1) (2) (3) (4) (5) Comprise limited partnership interests and other alternative investments, including real estate, timber and agriculture-related investments classified as other investments. Quarterly pre-tax yield is calculated as annualized quarterly investment income, before investment expense divided by the average of the current and prior quarter investment balances. Year-to-date pre-tax yield is calculated as annualized year-to-date investment income, before investment expense divided by the average of investment balances at the beginning of the year and the end of each quarter during the year. For the purposes of the pre-tax yield calculation, income for directly held real estate, timber and other consolidated investments is net of investee level expenses (depreciation and asset level operating expenses reported in investment expense). For investments carried at fair value, investment balances exclude unrealized capital gains and losses. Total return on investment portfolio is calculated from GAAP results including the total of net investment income, realized capital gains and losses, the change in unrealized net capital gains and losses, and the change in the difference between fair value and carrying value of mortgage loans, cost method limited partnerships, bank loans and agent loans divided by the average fair value balances. Average investment balances for the quarter are calculated as the average of the current and prior quarter investment balances. Year-to-date average investment balances are calculated as the average of investment balances at the beginning of the year and the end of each quarter during the year. For purposes of the average investment balances calculation, unrealized capital gains and losses are excluded. THE ALLSTATE CORPORATION NET INVESTMENT INCOME, YIELDS AND REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) ($ in millions) Three months ended Comprise fixed income securities, mortgage loans, short-term investments, and other investments including bank and agent loans and derivatives.

 
47 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 NET INVESTMENT INCOME Fixed income securities: Tax-exempt $ 22 $ 23 $ 23 $ 23 $ 23 Taxable 204 200 192 198 200 Equity securities 29 24 21 30 20 Mortgage loans 3 3 3 3 3 Limited partnership interests 55 82 69 60 58 Short-term 4 3 3 1 2 Other 22 24 22 23 20 Investment income, before expense 339 359 333 338 326 Less: Investment expense (28) (21) (23) (22) (24) Net investment income $ 311 $ 338 $ 310 $ 316 $ 302 Net investment income, after-tax $ 212 $ 231 $ 211 $ 215 $ 206 Interest-bearing investments $ 249 $ 246 $ 238 $ 241 $ 243 Equity securities 29 24 21 30 20 LP and other alternative investments 61 89 74 67 63 Investment income, before expense $ 339 $ 359 $ 333 $ 338 $ 326 PRE-TAX YIELDS Fixed income securities: Tax-exempt 1.9 % 2.0 % 2.0 % 2.1 % 2.1 % Equivalent yield for tax-exempt 2.8 2.9 2.9 3.1 3.1 Taxable 3.1 3.1 3.0 3.2 3.2 Equity securities 3.3 2.8 2.6 3.6 2.4 Mortgage loans 3.8 3.9 3.7 3.9 4.0 Limited partnership interests 7.1 11.0 9.6 8.6 8.9 Total portfolio 3.2 3.4 3.3 3.5 3.3 Interest-bearing investments 2.9 2.9 2.9 3.0 3.0 REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE Fixed income securities: Tax-exempt $ (2) $ (9) $ 8 $ 4 $ 3 Taxable 14 (17) 9 20 (47) Equity securities 106 49 42 15 (60) Limited partnership interests 27 (29) 13 (10) 13 Derivatives and other (10) 20 (19) (3) (8) Total $ 135 $ 14 $ 53 $ 26 $ (99) REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE Impairment write-downs $ (22) $ (27) $ (26) $ (42) $ (35) Change in intent write-downs (13) (17) (8) (12) (19) Net other-than-temporary impairment losses recognized in earnings (35) (44) (34) (54) (54) Sales and other 180 43 101 82 (41) Valuation and settlements of derivative instruments (10) 15 (14) (2) (4) Total $ 135 $ 14 $ 53 $ 26 $ (99) AVERAGE INVESTMENT BALANCES (in billions) $ 41.8 $ 41.1 $ 39.5 $ 38.5 $ 38.3 THE ALLSTATE CORPORATION PROPERTY-LIABILITY NET INVESTMENT INCOME, YIELDS AND REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) ($ in millions) Three months ended

 
48 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 NET INVESTMENT INCOME Fixed income securities $ 281 $ 280 $ 282 $ 288 $ 284 Equity securities 15 10 10 14 8 Mortgage loans 52 52 53 50 50 Limited partnership interests 65 96 67 66 63 Short-term 1 2 1 1 2 Other 33 34 32 33 30 Investment income, before expense 447 474 445 452 437 Less: Investment expense (21) (21) (18) (17) (18) Net investment income $ 426 $ 453 $ 427 $ 435 $ 419 Net investment income, after-tax $ 277 $ 294 $ 278 $ 282 $ 273 Interest-bearing investments $ 363 $ 364 $ 363 $ 369 $ 363 Equity securities 15 10 10 14 8 LP and other alternative investments 69 100 72 69 66 Investment income, before expense $ 447 $ 474 $ 445 $ 452 $ 437 PRE-TAX YIELDS Fixed income securities 4.7 % 4.6 % 4.6 % 4.7 % 4.6 % Equity securities 4.0 2.6 2.5 3.9 2.1 Mortgage loans 5.0 5.0 5.1 4.9 4.9 Limited partnership interests 9.3 14.1 10.2 10.7 10.7 Total portfolio 5.0 5.3 4.9 5.0 4.8 Interest-bearing investments 4.7 4.7 4.6 4.6 4.6 REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY ASSET TYPE Fixed income securities $ (7) $ (16) $ (19) $ (1) $ (26) Equity securities - 8 3 (4) (30) Mortgage loans - (1) - 1 - Limited partnership interests 13 (17) (1) - 13 Derivatives and other (7) 15 (4) 4 (6) Total $ (1) $ (11) $ (21) $ - $ (49) REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) BY TRANSACTION TYPE Impairment write-downs $ (21) $ (22) $ (37) $ (18) $ (24) Change in intent write-downs (3) (4) (2) (4) (3) Net other-than-temporary impairment losses recognized in earnings (24) (26) (39) (22) (27) Sales and other 28 5 19 21 (17) Valuation and settlements of derivative instruments (5) 10 (1) 1 (5) Total $ (1) $ (11) $ (21) $ - $ (49) AVERAGE INVESTMENT BALANCES (in billions) $ 35.4 $ 35.6 $ 35.7 $ 35.9 $ 35.9 THE ALLSTATE CORPORATION ALLSTATE FINANCIAL NET INVESTMENT INCOME, YIELDS AND REALIZED CAPITAL GAINS AND LOSSES (PRE-TAX) ($ in millions) Three months ended

 
49 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 MARKET-BASED ("MB") (1) Investment Position Interest-bearing investments $ 68,836 $ 69,688 $ 69,579 $ 68,357 $ 68,001 Equity securities 5,578 5,567 5,194 5,192 5,032 LP and other alternative investments (2) 555 535 481 405 403 Total $ 74,969 $ 75,790 $ 75,254 $ 73,954 $ 73,436 Investment income Interest-bearing investments $ 624 $ 622 $ 611 $ 618 $ 614 Equity securities 35 34 31 44 28 LP and other alternative investments - (1) 1 - - Investment income, before expense 659 655 643 662 642 Investee level expenses (3) (1) (1) (1) (1) (1) Income for yield calculation $ 658 $ 654 $ 642 $ 661 $ 641 Market-based pre-tax yield 3.6 % 3.6 % 3.6 % 3.7 % 3.6 % Interest-bearing investments pre-tax yield 3.7 3.7 3.7 3.7 3.7 Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (36) $ (26) $ (37) $ (50) $ (31) Change in intent write-downs (16) (21) (10) (16) (21) Net other-than-temporary impairment losses recognized in earnings (52) (47) (47) (66) (52) Sales and other 208 43 118 123 (80) Valuation and settlements of derivative instruments (10) 13 (13) (5) (6) Total $ 146 $ 9 $ 58 $ 52 $ (138) PERFORMANCE-BASED ("PB") (4) Investment Position Interest-bearing investments $ 108 $ 113 $ 130 $ 162 $ 162 Equity securities 107 99 94 73 85 LP and other alternative investments 5,959 5,797 5,626 5,505 5,194 Total $ 6,174 $ 6,009 $ 5,850 $ 5,740 $ 5,441 Investment income Interest-bearing investments $ 1 $ - $ 2 $ 5 $ 4 Equity securities 9 - - - - LP and other alternative investments 130 190 145 136 129 Subtotal 140 190 147 141 133 Investee level expenses (9) (8) (8) (8) (8) Income for yield calculation $ 131 $ 182 $ 139 $ 133 $ 125 Performance-based pre-tax yield 8.7 % 12.3 % 9.7 % 9.5 % 9.3 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (7) $ (23) $ (26) $ (13) $ (28) Change in intent write-downs - - - - (1) Net other-than-temporary impairment losses recognized in earnings (7) (23) (26) (13) (29) Sales and other - 4 3 (19) 21 Valuation and settlements of derivative instruments (5) 12 (2) 4 (3) Total $ (12) $ (7) $ (25) $ (28) $ (11) (1) (2) (3) (4) Market-based strategy seeks to deliver predictable earnings aligned to business needs and take advantage of short-term opportunities primarily through public and private fixed income investments and public equity securities. Performance-based strategy seeks to deliver attractive risk-adjusted returns and to replace market risk with idiosyncratic risk primarily through investments in private equity, real estate, infrastructure, timber and agriculture-related assets. THE ALLSTATE CORPORATION CONSOLIDATED INVESTMENT POSITION AND RESULTS BY STRATEGY ($ in millions) As of or for the three months ended When calculating the pre-tax yields, investee level expenses are netted against income for directly held real estate, timber and other consolidated investments. Market-based investments include publicly traded equity securities classified as limited partnerships.

 
50 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 MARKET-BASED Investment Position Interest-bearing investments $ 34,389 $ 35,138 $ 34,057 $ 32,729 $ 31,852 Equity securities 3,956 4,022 3,554 3,589 3,660 LP and other alternative investments 376 369 333 282 277 Total $ 38,721 $ 39,529 $ 37,944 $ 36,600 $ 35,789 Investment income Interest-bearing investments $ 248 $ 247 $ 236 $ 239 $ 240 Equity securities 24 24 21 30 20 LP and other alternative investments - (1) - - - Investment income, before expense 272 270 257 269 260 Investee level expenses (1) (1) (1) (1) (1) Income for yield calculation $ 271 $ 269 $ 256 $ 268 $ 259 Market-based pre-tax yield 2.8 % 2.8 % 2.8 % 3.0 % 2.9 % Interest-bearing investments pre-tax yield 2.9 2.9 2.9 3.0 3.0 Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (18) $ (13) $ (14) $ (25) $ (22) Change in intent write-downs (13) (17) (8) (12) (18) Net other-than-temporary impairment losses recognized in earnings (31) (30) (22) (37) (40) Sales and other 181 39 98 87 (48) Valuation and settlements of derivative instruments (9) 10 (13) (4) (3) Total $ 141 $ 19 $ 63 $ 46 $ (91) PERFORMANCE-BASED Investment Position Interest-bearing investments $ 94 $ 95 $ 109 $ 129 $ 128 Equity securities 56 52 50 43 49 LP and other alternative investments 3,129 3,046 2,954 2,917 2,770 Total $ 3,279 $ 3,193 $ 3,113 $ 3,089 $ 2,947 Investment income Interest-bearing investments $ 1 $ (1) $ 2 $ 2 $ 3 Equity securities 5 - - - - LP and other alternative investments 61 90 74 67 63 Subtotal 67 89 76 69 66 Investee level expenses (5) (4) (4) (3) (4) Income for yield calculation $ 62 $ 85 $ 72 $ 66 $ 62 Performance-based pre-tax yield 7.7 % 11.0 % 9.5 % 8.7 % 8.4 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (4) $ (14) $ (12) $ (17) $ (13) Change in intent write-downs - - - - (1) Net other-than-temporary impairment losses recognized in earnings (4) (14) (12) (17) (14) Sales and other (1) 4 3 (5) 7 Valuation and settlements of derivative instruments (1) 5 (1) 2 (1) Total $ (6) $ (5) $ (10) $ (20) $ (8) THE ALLSTATE CORPORATION PROPERTY-LIABILITY INVESTMENT POSITION AND RESULTS BY STRATEGY ($ in millions) As of or for the three months ended

 
51 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 MARKET-BASED Investment Position Interest-bearing investments $ 31,917 $ 32,317 $ 32,995 $ 33,387 $ 33,351 Equity securities 1,619 1,542 1,637 1,600 1,369 LP and other alternative investments 179 165 147 122 122 Total $ 33,715 $ 34,024 $ 34,779 $ 35,109 $ 34,842 Investment income Interest-bearing investments $ 363 $ 363 $ 363 $ 366 $ 362 Equity securities 11 10 10 14 8 LP and other alternative investments - - 1 - - Investment income, before expense 374 373 374 380 370 Investee level expenses - - - - - Income for yield calculation $ 374 $ 373 $ 374 $ 380 $ 370 Market-based pre-tax yield 4.6 % 4.5 % 4.5 % 4.6 % 4.4 % Interest-bearing investments pre-tax yield 4.7 4.7 4.6 4.6 4.5 Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (18) $ (13) $ (23) $ (22) $ (9) Change in intent write-downs (3) (4) (2) (4) (3) Net other-than-temporary impairment losses recognized in earnings (21) (17) (25) (26) (12) Sales and other 27 5 19 35 (31) Valuation and settlements of derivative instruments (1) 3 - (1) (3) Total $ 5 $ (9) $ (6) $ 8 $ (46) PERFORMANCE-BASED Investment Position Interest-bearing investments $ 14 $ 18 $ 21 $ 33 $ 34 Equity securities 51 47 44 30 36 LP and other alternative investments 2,830 2,751 2,672 2,588 2,424 Total $ 2,895 $ 2,816 $ 2,737 $ 2,651 $ 2,494 Investment income Interest-bearing investments $ - $ 1 $ - $ 3 $ 1 Equity securities 4 - - - - LP and other alternative investments 69 100 71 69 66 Subtotal 73 101 71 72 67 Investee level expenses (4) (4) (4) (5) (4) Income for yield calculation $ 69 $ 97 $ 67 $ 67 $ 63 Performance-based pre-tax yield 9.8 % 13.8 % 10.0 % 10.4 % 10.4 % Realized capital gains and losses (pre-tax) by transaction type Impairment write-downs $ (3) $ (9) $ (14) $ 4 $ (15) Change in intent write-downs - - - - - Net other-than-temporary impairment losses recognized in earnings (3) (9) (14) 4 (15) Sales and other 1 - - (14) 14 Valuation and settlements of derivative instruments (4) 7 (1) 2 (2) Total $ (6) $ (2) $ (15) $ (8) $ (3) THE ALLSTATE CORPORATION ALLSTATE FINANCIAL INVESTMENT POSITION AND RESULTS BY STRATEGY ($ in millions) As of or for the three months ended

 
52 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Investment position Limited partnerships Private equity (1) $ 4,139 $ 4,031 $ 3,839 $ 3,663 $ 3,324 Real estate (2) 1,140 1,102 1,130 1,204 1,229 Timber and agriculture-related (3) 185 179 171 170 170 PB - limited partnerships 5,464 5,312 5,140 5,037 4,723 Non-LP Private equity 161 151 165 179 190 Real estate 384 380 380 358 361 Timber and agriculture-related 165 166 165 166 167 PB - non-LP 710 697 710 703 718 Total Private equity 4,300 4,182 4,004 3,842 3,514 Real estate 1,524 1,482 1,510 1,562 1,590 Timber and agriculture-related 350 345 336 336 337 Total PB $ 6,174 $ 6,009 $ 5,850 $ 5,740 $ 5,441 Investment income Limited partnerships Private equity $ 114 $ 145 $ 112 $ 113 $ 85 Real estate 4 35 23 12 33 Timber and agriculture-related 2 (1) - 1 3 PB - limited partnerships 120 179 135 126 121 Non-LP Private equity 9 1 2 4 2 Real estate 10 9 8 8 8 Timber and agriculture-related 1 1 2 3 2 PB - non-LP 20 11 12 15 12 Total Private equity 123 146 114 117 87 Real estate 14 44 31 20 41 Timber and agriculture-related 3 - 2 4 5 Total PB $ 140 $ 190 $ 147 $ 141 $ 133 Investee level expenses $ (9) $ (8) $ (8) $ (8) $ (8) Realized capital gains and losses Limited partnerships Private equity $ (10) $ (26) $ (23) $ (20) $ 12 Real estate 1 2 2 - 1 Timber and agriculture-related - - - - - PB - limited partnerships (9) (24) (21) (20) 13 Non-LP Private equity (4) 16 (4) (8) (25) Real estate - 1 - - 1 Timber and agriculture-related 1 - - - - PB - non-LP (3) 17 (4) (8) (24) Total Private equity (14) (10) (27) (28) (13) Real estate 1 3 2 - 2 Timber and agriculture-related 1 - - - - Total PB $ (12) $ (7) $ (25) $ (28) $ (11) Pre-Tax Yield 8.7 % 12.3 % 9.7 % 9.5 % 9.3 % Internal Rate of Return (4) 10 Year 9.5 % 10.1 % 10.1 % 10.2 % 10.5 % 5 Year 11.9 12.0 11.7 12.0 12.7 (1) (2) (3) (4) The internal rate of return ("IRR") for our performance-based investments is one of the measures we use to evaluate the strategy's performance. The IRR represents the rate of return on the investments considering the cash flows and the estimated value of investment holdings. Until an investment is fully liquidated, through final distribution or disposal, the IRR is an interim estimated return. Our IRR calculation method may differ from those used by other investors. Our perfomance-based portfolio is diversified by asset type and vintage year. The IRR calculation includes cash flows paid or received related to PB investments during the measurement period, and valuation of investment holdings at the beginning and end of the measurement period. The timing and amount of cash flows and changes in estimated values could have a significant impact on the IRR. The timing of the recognition of income in the financial statements may differ significantly from the cash distributions and changes in the value of these investments. Includes Private equity on page 53, excluding Timber and agriculture-related. Includes Real estate on page 53. Includes Timber and agriculture-related reflected in Private equity on page 53. THE ALLSTATE CORPORATION PERFORMANCE-BASED INVESTMENTS ($ in millions) As of or for the three months ended

 
53 March 31, Dec. 31, Sept. 30, June 30, March 31, 2017 2016 2016 2016 2016 Investment position Accounting basis Cost method $ 1,293 $ 1,282 $ 1,375 $ 1,284 $ 1,193 Equity method ("EMA") (1) 4,689 4,532 4,213 4,123 3,898 Total $ 5,982 $ 5,814 $ 5,588 $ 5,407 $ 5,091 Cost method-fair value (2) $ 1,525 $ 1,493 $ 1,600 $ 1,511 $ 1,466 Underlying investment Private equity $ 4,324 $ 4,210 $ 4,010 $ 3,833 $ 3,494 Real estate 1,140 1,102 1,130 1,204 1,229 Other 518 502 448 370 368 Total $ 5,982 $ 5,814 $ 5,588 $ 5,407 $ 5,091 Segment Property-Liability $ 3,122 $ 3,042 $ 2,913 $ 2,842 $ 2,688 Allstate Financial 2,860 2,771 2,674 2,564 2,399 Corporate and Other - 1 1 1 4 Total $ 5,982 $ 5,814 $ 5,588 $ 5,407 $ 5,091 Total Income Accounting basis Cost method $ 37 $ 26 $ 43 $ 47 $ 39 Equity method 83 152 93 79 82 Total $ 120 $ 178 $ 136 $ 126 $ 121 Underlying investment Private equity $ 116 $ 144 $ 112 $ 114 $ 88 Real estate 4 35 23 12 33 Other - (1) 1 - - Total $ 120 $ 178 $ 136 $ 126 $ 121 Segment Property-Liability $ 55 $ 82 $ 69 $ 60 $ 58 Allstate Financial 65 96 67 66 63 Corporate and Other - - - - - Total $ 120 $ 178 $ 136 $ 126 $ 121 (1) (2) The fair value of cost method limited partnerships is determined using reported net asset values. THE ALLSTATE CORPORATION LIMITED PARTNERSHIP INTERESTS ($ in millions) As of or for the three months ended As of March 31, 2017, valuations of EMA limited partnerships include approximately $611 million of cumulative pre-tax appreciation that has been recognized in earnings but has not been distributed to investors.

 
54 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. Net income applicable 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, business combination expenses and the 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. Business combination expenses are excluded because they are non-recurring in nature and the 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 applicable to common shareholders to assess our performance. We use adjusted measures of operating income in incentive compensation. Therefore, we believe it is useful for investors to evaluate net income applicable 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 applicable to common shareholders and does not reflect the overall profitability of our business. A reconciliation of operating income to net income applicable to common shareholders is provided in the schedule, "Contribution to Income". Average underlying loss (incurred pure premium) and expense is calculated as the underlying combined ratio (a non-GAAP measure) multiplied by the GAAP quarterly earned premium, which is annualized (multiplied by 4) (“average premium”). We believe that this measure is useful to investors and it is used by management for the same reasons noted above for the underlying combined ratio. A reconciliation of average underlying loss and expense is provided in the schedule, "Allstate Brand Auto and Homeowners Underlying Loss and Expense". Underlying loss ratio is a non-GAAP ratio, which is computed as the difference between three GAAP operating ratios: the loss ratio, the effect of catastrophes on the combined ratio and the effect of prior year non-catastrophe reserve reestimates on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends that may be obscured by catastrophe losses and prior year reserve reestimates. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. The most directly comparable GAAP measure is the loss ratio. The underlying loss ratio should not be considered a substitute for the loss ratio and does not reflect the overall loss ratio of our business. A reconciliation of underlying loss ratio is provided in the schedules "Property Liability Results", "Allstate Brand Profitability Measures", "Esurance Brand Profitability Measures and Statistics" and "Encompass Brand Profitability Measures and Statistics". Combined ratio excluding the effect of catastrophes, prior year reserve reestimates and the amortization of purchased intangible assets ("underlying combined ratio") is a non-GAAP ratio, which is computed as the difference between four GAAP operating ratios: the combined ratio, the effect of catastrophes on the combined ratio, the effect of prior year non-catastrophe reserve reestimates on the combined ratio, the effect of amortization of purchased intangible assets on the combined ratio. We believe that this ratio is useful to investors and it is used by management to reveal the trends in our Property-Liability business that may be obscured by catastrophe losses, prior year reserve reestimates, amortization of purchased intangible assets. Catastrophe losses cause our loss trends to vary significantly between periods as a result of their incidence of occurrence and magnitude, and can have a significant impact on the combined ratio. Prior year reserve reestimates are caused by unexpected loss development on historical reserves. Amortization of purchased intangible assets relates to the acquisition purchase price and is not indicative of our underlying insurance business results or trends. We believe it is useful for investors to evaluate these components separately and in the aggregate when reviewing our underwriting performance. We also provide it to facilitate a comparison to our outlook on the underlying combined ratio. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered a substitute for the combined ratio and does not reflect the overall underwriting profitability of our business. A reconciliation of the underlying combined ratio to combined ratio is provided in the schedules "Property Liability Results", "Allstate Brand Profitability Measures", "Esurance Brand Profitability Measures and Statistics", "Encompass Brand Profitability Measures and Statistics", "SquareTrade Profitability Measures" and "Auto, Homeowners and Other Personal Lines Underlying Combined Ratios". Operating income return on common shareholders' equity is a ratio that uses a non-GAAP measure. It is calculated by dividing the rolling 12-month operating income by the average of common shareholders’ equity at the beginning and at the end of the 12-months, after excluding the effect of unrealized net capital gains and losses. Return on common shareholders' equity is the most directly comparable GAAP measure. We use operating income as the numerator for the same reasons we use operating income, as discussed above. We use average common shareholders' equity excluding the effect of unrealized net capital gains and losses for the denominator as a representation of common shareholders’ equity primarily attributable to the Company’s earned and realized business operations because it eliminates the effect of items that are unrealized and vary significantly between periods due to external economic developments such as capital market conditions like changes in equity prices and interest rates, the amount and timing of which are unrelated to the insurance underwriting process. We use it to supplement our evaluation of net income applicable to common shareholders and return on common shareholders' equity because it excludes the effect of items that tend to be highly variable from period to period. We believe that this measure is useful to investors and that it provides a valuable tool for investors when considered along with return on common shareholders' equity because it eliminates the after-tax effects of realized and unrealized net capital gains and losses that can fluctuate significantly from period to period and that are driven by economic developments, the magnitude and timing of which are generally not influenced by management. In addition, it eliminates non-recurring items that are not indicative of our ongoing business or economic trends. A byproduct of excluding the items noted above to determine operating income return on common shareholders' equity from return on common shareholders' equity is the transparency and understanding of their significance to return on common shareholders' equity variability and profitability while recognizing these or similar items may recur in subsequent periods. We use adjusted measures of operating income return on common shareholders' equity in incentive compensation. Therefore, we believe it is useful for investors to have operating income return on common shareholders' equity and return on common shareholders' equity when evaluating our performance. We note that investors, financial analysts, financial and business media organizations and rating agencies utilize operating income return on common shareholders' equity 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 utilization of capital. Operating income return on common shareholders' equity should not be considered a substitute for return on common shareholders' equity and does not reflect the overall profitability of our business. A reconciliation of return on common shareholders' equity and operating income return on common shareholders' equity can be found in the schedule, "Return on Common Shareholders' Equity". Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a ratio that uses a non-GAAP measure. It is calculated by dividing common shareholders’ equity after excluding the impact of unrealized net capital gains and losses on fixed income securities and related DAC, DSI and life insurance reserves by total common shares outstanding plus dilutive potential common shares outstanding. We use the trend in book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. We believe the non-GAAP ratio is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period and are generally driven by economic developments, primarily capital market conditions, the magnitude and timing of which are generally not influenced by management, and we believe it enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. We note that book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, is a measure commonly used by insurance investors as a valuation technique. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of unrealized net capital gains and losses on fixed income securities, should not be considered a substitute for book value per common share, and does not reflect the recorded net worth of our business. A reconciliation of book value per common share, excluding the impact of unrealized net capital gains on fixed income securities, and book value per common share can be found in the schedule, "Book Value per Common Share". Operating income is net income applicable 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, - business combination expenses and the 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.