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 29, 2008

The Allstate Corporation

(Exact name of registrant as specified in charter)

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

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

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

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

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

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

Section 2. — Financial Information

Item 2.02.             Results of Operations and Financial Condition.

On January 29, 2008, the registrant issued a press release announcing its financial results for the fourth quarter of 2007. A copy of the press release is furnished as Exhibit 99 to this report.

Section 9. — Financial Statements and Exhibits

Item 9.01.              Financial Statements and Exhibits.

(d)           Exhibits

99            Registrant’s press release dated January 29, 2008

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SIGNATURES

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

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Exhibit 99

Allstate Reports 2007 Fourth Quarter and Year-End Results

Company Improved Financial Strength, Is Well Positioned for 2008

NORTHBROOK, Ill., January 29, 2008 — The Allstate Corporation (NYSE: ALL) today reported results for the fourth quarter of 2007 and for the year ended December 31, 2007:

“Allstate’s strategy and operating performance in 2007 delivered on our commitments, generated excellent results, and enabled us to strengthen our competitive position,” said Thomas J. Wilson, president and chief executive officer of The Allstate Corporation. For the year, revenues reached $36.8 billion and net income of $4.6 billion ($7.77 per diluted share) was the second highest in Company history. The underlying Property-Liability combined ratio met the goal set for 2007; and return on equity was 21.2 percent, reflecting both the strong operating results and aggressive capital management.

“Our team also delivered strong results in the fourth quarter despite increased catastrophe losses and tumultuous investment markets,” continued Wilson. Net income for the fourth quarter of 2007 was $760 million, down $453 million from the year earlier period, due to a higher underlying Property-Liability combined ratio, unfavorable prior year reserve reestimates and an increase in catastrophe losses.

*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.

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Consumer Focus

“Our consumer-focused strategy enabled us to succeed in the market by offering innovative products and services that are reinventing protection for consumers,” Wilson added.

Allstate® Your Choice Auto Insurance (YCA) continued to add customers at a rate of more than 100,000 per month in the fourth quarter, bringing the total YCA policies sold since inception to 3.2 million. Allstate® Your Choice Home, the Company’s unique homeowners insurance product, is now available in 15 states. Allstate’s product offering for higher risk drivers, Allstate Blue^SM, is now available in 12 states and early production shows encouraging results.  In addition, Allstate Green^SM, a new eco-friendly insurance option that offers consumers a convenient way to help the environment, is now available for consumers in Colorado and Ohio.

Operational Excellence

“Maintaining a consistent focus on profitable growth resulted in excellent results for our Property-Liability business in 2007,” Wilson said. “Our consumer focus enabled us to maintain pricing discipline in the face of tough competition, with average premiums increasing in our core lines.”  Margins for the year declined resulting in a combined ratio of 89.8, reflecting a smaller benefit from prior year reserve reestimates, higher catastrophe losses and higher loss costs.  Increased loss costs represented about one third of the margin reduction and were due to increased frequency and severity of auto and homeowners claims. For the year, the combined ratio, excluding the effects of catastrophes and reserve reestimates, was 85.7, within the previously provided outlook range of 84.0 to 86.0.

The combined ratio for the fourth quarter was 95.9 (88.6 excluding catastrophes and the effect of prior year reserve releases) reflecting the same trends as for the year. Also in the fourth quarter, expenses were up related to advertising, marketing and technology investments in product and service innovations.

Allstate Financial continued to focus on improving returns, with new business returns increasing significantly over prior year, and leveraging both the Allstate branded property-liability customer base and its non-proprietary distribution relationships. Allstate Financial operating income was $158 million for the quarter, up 11.3% from the fourth quarter of 2006.  To optimize its capital position and leverage the diversification benefits of the enterprise, Allstate Financial paid dividends of $657 million in the fourth quarter, bringing total dividends paid by Allstate Financial to its parent companies in 2007 to $742 million. New sales of financial products by Allstate exclusive agencies* increased to $2.9 billion in 2007, a 13.8 percent increase from 2006.

“Our disciplined investment approach generated solid returns and shielded the portfolio from significant losses in a tumultuous market,” Wilson said. Net investment income for the year was $6.44 billion; $1.63 billion of that was earned in the fourth quarter. Investments generated substantial capital gains of $1.24 billion for the year, including $98 million in the fourth quarter, with strong equity portfolio performance more than offsetting losses in the fixed income portfolio.

Capital Management

In 2007, Allstate repurchased 61 million common shares for $3.55 billion, representing nearly 10 percent of shares outstanding at the beginning of the year. In the fourth quarter, 10.9 million shares were repurchased for $579 million. As of December 31, 2007, $240 million remained under the current $4.0 billion repurchase program, which is expected to be complete in the first quarter of 2008. Dividends of $0.38 per share were paid in the fourth quarter, bringing total shareholder dividends for the year to $901 million.

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People

“The Allstate team again outperformed the industry in 2007,” said Wilson, who marked the end of his first year as chief executive officer and his 13^th year with the Company. “We fulfilled the Good Hands promise to thousands of our customers in Southern California, helping them recover from one of the state’s costliest natural disasters. We also continued to reinvent protection and retirement for the consumer by launching several new innovative products. We kept our commitment to shareholders by meeting our combined ratio outlook for the year, generating solid growth in book value per share and attractive returns on equity.  In keeping with our commitment to our employees, we’re sharing the Company’s success with non-bonus eligible employees through a profit sharing match of $1.42 for every $1.00 they contributed to the Allstate Profit Sharing Fund.

Outlook

“Our four operational priorities of consumer focus, enterprise risk and return optimization, operational excellence and aggressive capital management will continue to deliver excellent returns and help us continue to outperform the industry in 2008.

“We expect our Property-Liability combined ratio, excluding the effects of catastrophes and prior year reserve reestimates, will be within the range of 87.0 to 89.0 for 2008,” Wilson concluded.

BUSINESS HIGHLIGHTS

Property-Liability

·                  Property-Liability premiums written declined 0.7% from the fourth quarter of 2006, reflecting growth in standard auto and a decline in homeowners due to catastrophe management actions including the increased cost of the catastrophe reinsurance program.  The cost of the catastrophe reinsurance program was $222 million in the fourth quarter of 2007 compared to $209 million in the fourth quarter of 2006.  Excluding the cost of the catastrophe reinsurance program, premiums written decreased 0.5%.

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·                  Allstate brand standard auto premiums written grew 1.5% in the fourth quarter of 2007 compared to the prior year quarter.  Contributing to the overall change were the following:

-0.9% increase in policies in force (“PIF”)

-0.8 point decline in the renewal ratio to 88.9%

-1.4% increase in six month average premium before reinsurance to $427

-                 3.5% decrease in new issued applications

(1)Hurricane exposure states are Alabama, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington D.C.

·                  Allstate brand homeowners premiums written declined 1.3% in the fourth quarter of 2007, compared to the prior year quarter, primarily due to our catastrophe risk management actions.  Excluding the cost of the catastrophe reinsurance program, Allstate brand homeowners premiums written decreased 0.1% in the fourth quarter of 2007 when compared to the prior year quarter.  Contributing to the overall change were the following:

-                 3.4% decrease in PIF

-                 1.7 point decline in the renewal ratio to 86.1%

-                 2.6% increase in twelve month average premium before reinsurance to $856

-                 23.7% decrease in new issued applications.

(1)   Hurricane exposure states are Alabama, Connecticut, Delaware, Florida, Georgia, Louisiana, Maine, Maryland, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia and Washington D.C.

·                  During January 2008, we completed the renewal of our catastrophe reinsurance agreements countrywide, except for Florida.  We expect to place contracts for the state of Florida later this year.  We estimate that the total annualized cost of all reinsurance programs for the year beginning June 1, 2008 will be approximately $660 million per year or $165 million per quarter, including an estimate for reinsurance coverage in Florida.  This is compared to approximately $900 million per year for our total annualized cost for the year beginning June 1, 2007, or an estimated annualized cost decrease of $240 million beginning June 1, 2008.  The estimated decrease is due in part to our reduced exposure in Florida following our non-renewal activities over the past year.  We continue to attempt to capture our reinsurance cost in premium rates as allowed by state regulatory authorities.  We are currently involved in proceedings regarding homeowners insurance rates and our ability to capture these reinsurance costs in various states including California, Florida and Texas.  For

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detailed information on our catastrophe reinsurance program, see http://media.corporate-ir.net/media_files/irol/93/93125/reports2/all_4q07_reinsurance.pdf.

·                  Standard auto property damage frequencies increased 2.8% while bodily injury gross claim frequencies decreased 2.8% compared to the fourth quarter of 2006.  Auto property damage and bodily injury paid severities increased 2.2% and 9.3%, respectively.  The Allstate brand standard auto loss ratio increased 5.3 points compared to the fourth quarter of 2006 to 70.3 in the fourth quarter of 2007, due to the absence of favorable reserve reestimates, and higher frequencies and current year severities.

·                  Homeowner gross claim frequency excluding catastrophes increased 4.6% compared to the fourth quarter of 2006.  Homeowners severity excluding catastrophes increased 7.9% compared to the fourth quarter of 2006.  The Allstate brand homeowners loss ratio increased 22.1 points compared to the fourth quarter of 2006 to 74.8 in the fourth quarter of 2007, due to higher catastrophes and higher frequencies and current year severity. The effect of catastrophe losses on the Allstate brand homeowners loss ratio totaled 28.4 in the fourth quarter of 2007 compared to 16.5 in the fourth quarter of 2006.

·                  Property-Liability prior year reserve reestimates for the fourth quarter of 2007 were an unfavorable $48 million, compared to favorable prior year reserve reestimates of $184 million in the fourth quarter of 2006.  The unfavorable prior year reserve reestimates for the quarter were primarily related to catastrophes totaling $26 million, as discussed below, and Discontinued Lines and Coverages totaling $16 million.

·                  Catastrophe losses for the quarter totaled $472 million, compared to $279 million in the fourth quarter of 2006.  This increase was primarily due to $318 million in catastrophe losses related to the Southern California wildfires in October.  Catastrophe losses, excluding prior year reserve reestimates, were $446 million in the quarter compared to $279 million in the fourth quarter of 2006, impacting the combined ratio by 6.6 points in the quarter and 4.1 points in the fourth quarter of 2006.  Unfavorable reserve reestimates related to catastrophes from prior years totaled $26 million in the quarter.  There were no reserve reestimates included in catastrophe losses in the fourth quarter of 2006.  The prior year reserve reestimates in the 2007 fourth quarter were primarily attributable to increased loss reserves for reopened claims arising from litigation filed in conjunction with a Louisiana deadline for filing suits related to Hurricane Katrina.

·                  Underwriting income was $276 million during the fourth quarter of 2007 compared to $978 million in the same period of 2006.  The decrease was due to a higher underlying combined ratio, the unfavorable change in prior year reserve reestimates and higher catastrophe losses.

·                  The Property-Liability combined ratio was impacted by catastrophe losses and prior year reserve reestimates.  The impacts for the three months and twelve months ended December 31 are shown in the table below.

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·                  Our outlook for the Property-Liability 2008 combined ratio excluding the effect of catastrophe losses and prior year reserve reestimates is in the range of 87.0 to 89.0.  This outlook is based on various assumptions, the most important of which are listed below:

-                    Premiums written slightly higher than 2007 levels due to standard auto growth;

-                    Loss costs are expected to increase higher than average premiums.

Allstate Financial

·                  Premiums and deposits in the fourth quarter of 2007 were $1.81 billion, a decrease of 19.3% from the prior year quarter.  This decline was due to the fact that there were no deposits on institutional products during the fourth quarter of 2007 compared to $500 million in the fourth quarter of 2006.  Sales of our institutional products vary from period to period based on management’s assessment of market conditions.

·                  Operating income for the fourth quarter of 2007 was $158 million, $16 million higher than the prior year quarter primarily due to increased income on limited partnership interests, increased contract charges and an energy tax credit which reduced income tax expense.

·                  Net income for the fourth quarter of 2007 was $31 million, $117 million below the prior year quarter.  The decline was due to higher realized capital losses and a loss on disposition of operations.  Higher net capital losses were driven by $95 million in investment write-downs and a $120 million decline in the valuation of derivative instruments, including investments in equity-linked notes and economic hedges of interest rate risk.

Investments

·                  Allstate’s investment portfolios totaled $118.98 billion as of December 31, 2007, a decline of $2.15 billion from the third quarter of 2007, primarily due to lower funds associated with collateral received in conjunction with securities lending and other activities, which declined $1.05 billion, and lower net unrealized gains.

·                  The decrease in net unrealized gains during the fourth quarter of 2007 was related primarily to unrealized losses on investment grade fixed income securities, resulting from widening credit spreads and credit exposure related to certain collateralized securities more than offsetting the effects of declining interest rates, and sales of equity securities with net realized gains totaling $351 million.  Total unrealized gains and losses are shown in the table below.

(1) For further information on our sub-prime residential and commercial mortgage loan portfolio, see the Residential and Commercial Mortgage-Backed and Other Asset -Backed Securities section.

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·                  Net investment income increased 4.0% to $1.63 billion compared to the prior year quarter.  Property-Liability net investment income increased 3.8% to $490 million, compared to the prior year quarter, benefiting from increased income on limited partnership interests and increased portfolio yields when compared to the same period in the prior year.  Allstate Financial net investment income rose 2.6% to $1.09 billion, compared to the prior year quarter, including increased income from limited partnership interests.

·                  Net realized capital gains were $98 million on a pre-tax basis for the quarter, primarily due to $384 million of net gains related to dispositions, including $332 million of gains related to equity securities in the Property-Liability portfolio, and $6 million of net gains related to the settlement of derivative instruments.  Partially offsetting realized capital gains were $166 million of net losses related to valuations of derivative instruments primarily due to changes in underlying interest rates and $126 million of investment write-downs, including $20 million relating to asset-backed residential mortgage-backed securities and $62 million relating to asset-backed collateralized debt obligations.  Approximately $53 million or 31.8% of the losses related to the valuations of derivative instruments relate to economic hedging instruments that support investments whose valuation changes are reported in shareholders’ equity.

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THE ALLSTATE CORPORATION

CONSOLIDATED AND SEGMENT HIGHLIGHTS

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THE ALLSTATE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS