UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

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) January 31, 2006

The Allstate Corporation

(Exact name of registrant as specified in charter)

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

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

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

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

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

Section 2 – Financial Information

Item 2.02.              Results of Operations and Financial Condition.

On January 31, 2006, the registrant issued a press release announcing its financial results for the fourth quarter of 2005. A copy of the press release is furnished as Exhibit 99 to this report.

Section 8 – Other Events

Item 8.01.              Other Events.

The following excerpt from the press release dated January 31, 2006 is filed under this Item 8.01.

Reinsurance

We utilize reinsurance to reduce exposure to catastrophe risk and to help manage capital, while lessening earnings volatility and improving shareholder return, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries.  We purchase significant reinsurance where we believe the greatest benefit will be achieved relative to our aggregate countrywide exposure.  The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process, along with whether the price can be appropriately reflected in the costs that are considered in setting future rates charged to policyholders.

Our catastrophe reinsurance program has been designed to coordinate coverage provided under various treaties.  As discussed below, our reinsurance program is composed of treaties that provide coverage for state specific personal lines property catastrophe exposures, with various retentions and limits.  In addition, the program includes an aggregate excess agreement that limits Allstate Protection’s personal lines property and auto catastrophe losses for storms named or numbered by the National Weather Service, earthquakes, and fires following earthquakes in excess of $2 billion in aggregated losses up to the treaty limit of $2 billion, excluding Florida. Losses recovered, if any, from the state specific treaties are excluded when determining the retention of the aggregate excess agreement.  We have placed these programs in the global reinsurance market, with the majority of the limits of these programs placed with reinsurers that currently have an A.M. Best rating of A+ or better.  The remaining limits are placed with reinsurers that currently have an A.M. Best rating no lower than A-.

Multi-year individual state reinsurance treaties cover personal property excess catastrophe losses in seven states: Connecticut, New Jersey, New York, North Carolina, South Carolina and Texas through May 31, 2008 and Florida through May 31, 2007 (the

2

“multi-year treaties”).  The annual retentions and limits on these treaties in effect since June 1, 2005 are shown in the following table.

(1)                        The Florida Hurricane Catastrophe Fund (“FHCF”) provides 90% reimbursement of qualifying losses up to an estimated maximum.  For the 6/1/2005 – 5/31/2006 hurricane season, this maximum is estimated to be $945 million in excess of Allstate’s retention of $262 million for the two largest hurricanes and $87 million for other hurricanes.

(2)                        Reinsurance is recoverable by Allstate Texas Lloyd’s (“ATL”), a syndicate insurance company.  ATL also has a 100% reinsurance agreement with Allstate Insurance Company (“AIC”) covering losses in excess of and/or not reinsured by the Texas treaty.

The multi-year treaties provide coverage per occurrence for covered losses above each respective retention to the respective maximum coverage limit according to the percent placed on Allstate brand policies in each state except for Florida.  The Florida treaty provides coverage for policies written by Allstate Floridian.  Each of these treaties also has a provision for reinstatement and annual measurement of exposures, which may produce changes in retentions, limits and/or reinsurance premiums as a result of increases or decreases in our exposure levels from the previous year.  Under the current New Jersey and Texas treaties, we have the option to expand coverage limits by $100 million per year in each of the two subsequent years, and we expect to exercise the first $100 million limit increase option under both contracts effective June 1, 2006.  We also expect to terminate the existing treaties in the states of North Carolina and South Carolina on May 31, 2006.

We are also considering additional reinsurance that covers Allstate Protection’s personal property excess catastrophe losses in New Jersey, effective June 1, 2006 (the “New Jersey agreement”).  This new agreement could provide as much as $300 million of coverage in excess of the New Jersey multi-year treaty limit on an annual basis.

We have also entered into a reinsurance agreement that covers Allstate Protection’s personal property excess losses in California for fires following earthquakes, effective February 1, 2006 and expiring May 31, 2008 (the “California fire following agreement”).   This agreement provides coverage not to exceed $1.5 billion for any one loss occurrence in excess of $500 million, with Allstate retaining a 5% share of the agreement’s limit. With respect to all loss occurrences, this agreement provides in total $3 billion of coverage for all qualifying losses without limitation except when a qualifying loss occurrence exceeds $2 billion, then for 21 days no additional recovery can occur for any losses within the same seismic geographically affected area. The agreement allows for annual measurements, which may produce changes in retention as a result of increases or decreases in our exposure levels from a previous year.

We have entered into a catastrophe aggregate excess of loss reinsurance agreement with respect to storms named or numbered by the National Weather Service, earthquakes, and

3

fires following earthquakes covering our personal lines property and auto business countrywide, excluding Florida, for a period of one year, with an effective date of June 1, 2006 (the “aggregate excess agreement”).  In December 2005, we placed $750 million of a limit of $2 billion in excess of $2 billion of aggregate losses during the agreement’s one-year term.  In January 2006, we completed the balance of the program, placing an additional $1.15 billion of the limit while retaining a 5% share.  The aggregate excess agreement applies to Allstate and Encompass brand policies.

The annual retentions and limits on the agreements expected to be in place during 2006 are shown in the following table.

(1) Aggregate Excess Agreement – This agreement is effective 6/1/2006 for 1 year and covers storms named or numbered by the National Weather Service, earthquakes, and fires following earthquakes for the Allstate and Encompass brand personal lines auto and property business countrywide except for Florida.  Losses recovered, if any, from our California fire following agreement, multi-year treaties and any new New Jersey agreement are excluded when determining the retention of this agreement.

(2) California Fire Following Agreement – This agreement is effective 2/1/2006 and expires 5/31/2008.  This agreement covers Allstate and Encompass brand personal property losses in California for fires following earthquakes.  This agreement provides in total $3 billion of coverage for all qualifying losses except when a qualifying loss occurrence exceeds $2 billion, then for 21 days no additional recovery can occur for any losses within the same seismic geographically affected area.

(3) Multi-year Treaties – These treaties have been in effect since 6/1/2005 and cover the Allstate brand personal property catastrophe losses, expiring 5/31/2008, except for the treaty in Florida.  The Florida treaty provides coverage for property policies written by Allstate Floridian and it expires 5/31/2007.  This chart reflects our expectation that we will expand coverage limits by $100 million per year on the New Jersey and Texas treaties effective 6/1/2006, and that we expect to terminate the existing treaties in North Carolina and South Carolina on 5/31/2006.  The retentions, limits and/or reinsurance premiums on these treaties are also subject to annual measurements on their anniversary dates.

(4) Two separate reinsurance treaties provide coverage for catastrophe risks in the State of New York:  Allstate Insurance Company (“AIC”) has a $500,000,000 retention and a $550,000,000 limit, and Allstate Indemnity Company has a $250,000,000 retention and a $450,000,000 limit.

(5) The Texas treaty is with Allstate Texas Lloyd’s (“ATL”), a syndicate insurance company.  ATL also has a 100% reinsurance agreement with AIC covering losses in excess of and/or not reinsured by the Texas treaty.

4

(6) FHCF – The Florida Hurricane Catastrophe Fund (“FHCF”) provides 90% reimbursement of qualifying losses up to an estimated maximum.  For the 6/1/2005 – 5/31/2006 hurricane season, this maximum is estimated to be $945 million in excess of Allstate’s retention of $262 million for the two largest hurricanes and $87 million for other hurricanes.  These estimates are subject to annual measurements at the beginning of the FHCF fiscal year of 6/1.  This is an annual program with a first season and second season coverage provision.

(7) New Jersey Agreement – This agreement is being contemplated, but has not yet been placed.  This agreement is expected to be effective 6/1/2006.

We anticipate that the total cost of these agreements will be approximately $600 million per year or $150 million per quarter.  This represents an increase of approximately $400 million per year or $100 million per quarter over our current cost, once these agreements are fully implemented and effective.  Based on the effective dates of these agreements, our total costs are expected to be approximately $60 million in the first quarter of 2006, $100 million in the second quarter of 2006 and $150 million in the third and fourth quarters of 2006.  We will aggressively seek regulatory approvals, as necessary based on the challenging regulatory environment in each state, to include reinsurance costs in our premium rates in order to mitigate the impact of this increase. We currently expect that this level or a similar level of reinsurance coverage will be purchased or renewed for 2007. We also continue to study the efficiencies of our operations and cost structure, which may offset some portion of the increased reinsurance costs.

This current report on Form 8-K contains forward-looking statements about changes in the Registrant's reinsurance program, the related premium and reductions in costs. These statements are subject to the Private Securities Litigation Reform Act of 1995 and are based on management's estimates, assumptions and projections.  The actual changes in the reinsurance program, related premium and cost reductions may differ materially from those discussed in this report due to not yet placing the remainder of our program in the reinsurance market and in the ability to reduce expenses to the desired level.

Section 9. – Financial Statements and Exhibits

Item 9.01.              Financial Statements and Exhibits.

5

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, thereunto duly authorized.

6

Exhibit 99

For Immediate Release

Allstate Reports 2005 Fourth Quarter Net Income EPS of $1.59

Fourth Quarter Operating Income EPS of $1.49

Provides Guidance on 2006

NORTHBROOK, Ill., January 31, 2006 – The Allstate Corporation (NYSE: ALL) today reported for the fourth quarter of 2005:

Consolidated Highlights(1)

•        Property-Liability premiums written(1) grew 2.4% over the fourth quarter of 2004, driven by Allstate brand standard auto and homeowners increases of 3.5% and 6.3%, respectively.  Excluding the cost of catastrophe reinsurance programs premiums written grew 2.8% in the fourth quarter compared to the fourth quarter of last year.  Policies in force (“PIF”) increased for the Allstate brand standard auto and homeowners 2.9% and 3.4%, respectively, from December 31, 2004 levels.

•        Property-Liability underwriting income(1) decreased $10 million to $752 million compared to $762 million in the fourth quarter of 2004, driven by increased premiums earned and continued favorable auto and homeowners loss frequencies, excluding catastrophes, and lower operating costs, offset by higher catastrophe losses of $245 million.

•        Catastrophe losses, net of reinsurance and other recoveries, totaled $427 million after-tax ($657 million pre-tax) in the fourth quarter of 2005, compared to $268 million after-tax ($412 million pre-tax) in the fourth quarter of 2004. The effect of catastrophes on net income per diluted share was $0.65 compared to $0.39 per diluted share in the fourth quarter of 2004.  Catastrophe losses include Hurricane Wilma totaling $330 million after-tax ($508 pre-tax), net of recoveries, an accrual of $50 million after-tax ($77 million pre-tax) for anticipated assessments from Citizens Property Insurance Corporation in the state of Florida, and net favorable reestimates of losses related to Hurricanes Katrina and Rita totaling $29 million after-tax ($45 million pre-tax), net of recoveries.

•        Allstate Financial operating income for the quarter was $139 million, compared to $142 million in the fourth quarter of 2004.  Premiums and deposits(1) were $4.01 billion, a decrease of 3.7% over the fourth quarter of 2004, due to lower fixed annuity deposits reflecting reduced consumer demand in the current interest rate environment and pricing actions taken to achieve higher returns.

•        Full year 2005 operating income per diluted share was $2.37 compared to $4.41 in 2004. The $2.04 per diluted share decrease was more than accounted for by substantial increases in catastrophe losses, which were $3.12 per diluted share higher in 2005 compared to 2004.

•        Allstate’s annual operating income per diluted share guidance for 2006 (assuming the level of average expected catastrophe losses used in pricing for the year) is in the range of $5.60 to $6.00.  For further

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

1

details about some of the important assumptions on which this guidance is based see the “Consolidated Highlights” section of this press release.

“Allstate finished the year with a solid performance in the quarter.  Operating income was $975 million despite the sizeable influence on our results from catastrophe losses,” said Edward M. Liddy, chairman and chief executive officer, The Allstate Corporation. “Hurricane Wilma, which struck south Florida as a category 3 hurricane in late October 2005, cost Allstate more than $500 million and will be one of the ten most costly catastrophes in U.S. history. Catastrophe losses in the quarter exceeded the average expected catastrophe losses we use in pricing by $0.30 per diluted share. Our book value per share increased by a strong 4.6 percent over the third quarter of 2005.

“Overall, our property-liability written premium grew 2.4 percent in the fourth quarter compared to the fourth quarter of 2004. Allstate brand standard auto and homeowners written premium grew 3.5 percent and 6.3 percent, respectively in the quarter compared to the prior year’s quarter. Excluding the effects of catastrophe losses the combined ratio of 79.4 was an exceptional result.

“In particular, our auto insurance business generated very good profitability helped by the favorable trends we continue to see in the frequency and severity of automobile accidents. Our superior claim handling practices over the long term are an important differentiator between Allstate and the rest of the industry and the principal reason why our severity experience is better than our competitors.

“For the year, we were able to earn a profit after being hit by three of the ten most costly natural disasters in U.S. history. Our ability to be profitable in such a difficult year is a testament to the effectiveness of our strategy, our focus on superior execution and the diversity of our product offerings. In the quarter, we continued to make great progress in rolling out the company’s newest generation of our sophisticated underwriting and pricing process for automobile and homeowners insurance. Allstate^® Your Choice Auto insurance is continuing its introduction into more states.

“I am especially proud of how our employees and agency owners responded to our customers during the 2005 hurricane season and their dedication to the difficult job they faced. The hurricane season of 2005 tested our company’s ability to respond to those in need and deliver on our promise. We received hundreds of thousands of claims from customers and dispatched thousands of employees to help those who suffered losses from these terrible storms. Agency owners, many of whom were personally affected, also did tremendous work on behalf of their customers during this difficult time. To date, we’ve made significant progress in helping our customers impacted by Hurricanes Katrina, Rita, and Wilma. We have closed approximately 75 percent of the property claims and 97 percent of the auto claims filed from these three huge storms. I am pleased to say that we are once again able to demonstrate how well we deliver on the simple notion expressed by our slogan. Allstate customers are most certainly in “Good Hands^®.”

“We have made great progress on our property catastrophe management strategy by completing the placement of a new catastrophe aggregate excess of loss reinsurance agreement for our personal lines property and auto insurance business.  This agreement covers the entire country, excluding Florida, and has a $2 billion limit on losses in excess of $2 billion, with a retention of 5 percent. This will significantly reduce our exposure to hurricanes and earthquakes as well as the probability of experiencing a loss in excess of $2 billion.

“We are also intentionally slowing the writing of new property insurance business in certain markets to help limit our exposure to catastrophe losses caused by hurricanes and earthquakes. Written premium for our homeowners line of business has slowed and may turn negative as we accelerate our implementation of the company’s property catastrophe management strategy.

“While we manage down our exposure to property insurance in areas that are highly susceptible to significant catastrophe loss, we are continuing our call for public policy change and a more rational approach to how Americans prepare for and protect themselves against the devastating and highly unpredictable effects of catastrophes.

2

“Allstate Financial generated operating income in the quarter of $139 million compared to $142 million in the fourth quarter of 2004. For the full year, operating income increased 5 percent to $581 million from $551 million in 2004. Total premiums and deposits were down slightly in the fourth quarter of 2005 to $4.01 billion from $4.16 billion in the fourth quarter of 2004. The reduced retail sales are a reflection of lower industry-wide fixed annuity sales and our continued discipline in pricing. Overall, we remain focused on our strategy of improving returns at Allstate Financial. We are making progress and will continue our efforts to improve returns and drive profitable growth.”

Allstate’s annual operating income per diluted share guidance for 2006 is in the range of $5.60 to $6.00.  This guidance is based on several important assumptions, which you will find in the “Consolidated Highlights” section of this press release.

3

Consolidated Highlights

•        Book value per diluted share decreased 2.2% compared to December 31, 2004, but increased 4.6% when compared to September 30, 2005.  Book value per diluted share excluding the net impact of unrealized net capital gains on fixed income securities(1) was $29.08 at December 31, 2005, reflecting an increase of 1.6% compared to December 31, 2004 and 5.9% when compared to September 30, 2005.

•        Guidance on operating income per diluted share for 2006 is based on a variety of assumptions, the most important of which are listed below:

•        premiums written comparable to 2005 levels due to the estimated effects of catastrophe management actions on homeowners and other property premiums, including an increase in ceded premium for catastrophe reinsurance totaling approximately $300 million (we intend to seek regulatory approvals to include these costs in premium rates in subsequent years);

•        average expected catastrophe losses used in pricing of approximately 6% of earned premium;

•        auto and homeowners frequency, excluding catastrophes, consistent with the level in 2005;

•        no prior year reserve reestimates;

•        a slight decline in Property-Liability net investment income due to higher cash outflows; and

•        the completion of the current $4 billion share repurchase program.

4

Property-Liability Highlights

•        Allstate brand standard auto and homeowners PIF increased 2.9% and 3.4%, respectively, from December 31, 2004 levels, compared to increases of 3.6% and 4.4%, respectively, in the third quarter of 2005 over the third quarter of 2004.  PIF results exclude Allstate Canada.

•        New business premiums written for the Allstate brand standard auto increased 2.9% while new business applications declined 7.3%.  The difference in those trends was primarily due to growth in average premiums.  New business premiums include customers who are new to a particular Allstate subsidiary, even if such customers were previously insured by another Allstate subsidiary.  New business premiums written for Allstate brand homeowners decreased by 7.8% due to our proactive catastrophe risk management actions.

•        The renewal ratios for Allstate brand standard auto and homeowners were 90.0 and 87.5, respectively, compared to 90.6 and 88.7 in the prior year fourth quarter.  The standard auto declines are due to competitive pressures in certain states and the homeowner declines are primarily due to our proactive catastrophe risk management actions.  Renewal ratios exclude Allstate Canada.

•        Prior year favorable reserve re-estimates for the quarter totaled $146 million, compared to $189 million in the prior year fourth quarter, resulting from lower actual claim severity trends and late reported loss development than anticipated in previous estimates in Allstate Protection.

5

Allstate Financial Highlights

•        Investments including Separate Account assets as of December 31, 2005 increased 4.1% over December 31, 2004 primarily due to sales of fixed annuities and funding agreements.

•        As of December 31, 2005, 71% of our interest-sensitive life and fixed annuity contracts, excluding market value adjusted annuities, have a guaranteed crediting rate of 3% or higher.  Of these contracts, 79% have crediting rates that are at the minimum as of December 31, 2005.  For all interest-sensitive life and fixed annuity contracts, excluding market value adjusted annuities, the approximate difference between the weighted average crediting rate and the average guaranteed crediting rate is 46 basis points as of December 31, 2005 compared to 48 basis points as of September 30, 2005.

•        New sales of financial products by Allstate exclusive agencies(1) increased 2.4% over the fourth quarter of 2004 to $755 million.

•        Total fixed annuity deposits were $1.50 billion, a decrease of 37.9% from the fourth quarter of 2004 and 22.1% above the third quarter of 2005.  Consumer demand for fixed annuities has declined due to increased competition from certificates of deposit and other short-term instruments in the current interest rate environment.  Additionally, pricing actions taken to achieve higher returns contributed to lower fixed annuity deposits.  Traditional deferred fixed annuity deposits in the fourth quarter of 2005 were $1.04 billion, a decrease of 46.8% from the prior year.  This decrease was partially offset by deposits on equity indexed annuities of $213 million, a 17.0% increase over the fourth quarter of 2004.

•        Variable annuity deposits were $431 million in the quarter, an increase of 4.9% over the fourth quarter of 2004 and 4.6% below the third quarter of 2005.

•        Allstate Financial had total institutional products deposits of $1.35 billion during the fourth quarter, more than double the fourth quarter of 2004.  Our institutional business remains opportunistic.

•        Allstate Financial paid intercompany dividends totaling $250 million in the fourth quarter of 2005.  We will continue to seek ways to more efficiently utilize the capital of Allstate Financial.

6

THE ALLSTATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

(1)     As prescribed by accounting principles generally accepted in the United States, the quarter income per share amounts have been computed discretely. Because of our third quarter 2005 net loss, the antidilutive effects of potential common shares outstanding totaling 5.6 million were excluded from weighted average shares-diluted in that quarter. Accordingly, the sum of our income per share amounts for the four quarters of 2005 does not equal the year-to-date per share amount.

7

THE ALLSTATE CORPORATION
CONTRIBUTION TO INCOME