Standard & Poor's Announces: Allstate Insurance Co. and Affiliates 'AA' Ratings Affirmed.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 30, 2004

On Jan. 30, 2004, Standard & Poor's Ratings Services affirmed its 'AA' counterparty credit and financial strength ratings on Allstate Insurance Co. and related group members (collectively referred to as AIC). The outlook on all companies is stable except for Northbrook Indemnity Co., which has a negative outlook.

The ratings are based on the group's excellent market position, improved operating results, and strong capitalization. Partially offsetting these positive factors are uncertainties associated with the discontinued lines and coverages reserves of its Specialty Operations Division and the group's exposure to catastrophe losses in certain regions of the U.S.

Outlook

The operating performance of Allstate Corp.'s (NYSE:ALL) property/casualty operations is expected to show continued improvement over the next two years, with a combined ratio of about 95% for full-year 2003. Capital adequacy is expected to remain at about 160% at year-end 2003 and increase to 160%-165% over the medium term. Financial leverage is expected to remain at current levels (19%) or lower, while interest coverage is expected to remain very strong in 2003 and 2004. Standard & Poor's believes the group is well positioned to benefit from its scale, geographic diversification, and the hard property/casualty market.

On the investment side of the business, Standard & Poor's expects investment margins to continue to improve through 2003. Premiums are expected to grow by about 5%.