A.M. Best Assigns Indicative Ratings to The Allstate Corporation's Shelf Registration.

OLDWICK, N.J. -- A.M. Best Co. has assigned indicative debt ratings of "a" to senior unsecured debt, "a-" to subordinated debt, "a-" to trust preferred securities and "bbb+" to preferred stock of The Allstate Corporation's (Allstate) (NYSE: ALL) (Northbrook, IL) recently filed shelf registration. The outlook for the above ratings is negative. The financial strength rating (FSR) of A+ (Superior) for Allstate Insurance Group (Northbrook, IL) and the existing debt and issuer credit ratings of Allstate remain unchanged. The FSR outlook remains stable.

This shelf registration has an undesignated amount of securities, which can be issued in accordance with recently adopted Securities and Exchange Commission rules for seasoned issuers and replaces Allstate's existing $2.8 billion shelf registration, which had $700 million of capacity remaining. Under the terms of the shelf, Allstate may issue an indeterminate number of senior debt securities, subordinated debt securities, preferred stock, depositary shares, common stock, warrants, stock purchase contracts and stock purchase units. In addition, trust preferred securities can be issued through Allstate Financing III, IV, V and VI.

Despite a considerable statutory surplus decline in 2005 due to lower net income as a result of catastrophe losses, more than offset by larger dividend payments to its parent, Allstate maintains favorable risk-adjusted capitalization. The group reported positive earnings for 2005. In addition, Allstate's non-catastrophe operating performance has been excellent, and it has a significant market presence and strong overall business profile. Furthermore, Allstate maintains moderate financial leverage as well as additional liquidity provided by Kennett Capital, Inc., an affiliated investment company, and at the holding company through its liquid assets, access to capital markets, available lines of credit and its commercial paper program.

The rating also reflects A.M. Best's expectation that Allstate will maintain substantial levels of liquid assets at the holding company and at Kennett Capital, Inc. and the expectation that Allstate Insurance Company's (Northbrook, IL) statutory surplus will be restored through retained earnings to a level maintained prior to the occurrence of the 2005 hurricane season. Although Allstate maintains favorable capitalization, particularly when including the corporate level assets, the negative outlook for the existing debt and issuer credit ratings reflects its deteriorated risk-adjusted capitalization, as well as significant catastrophe volatility experienced over the last two years. While Allstate has implemented significant catastrophe risk reduction actions in 2006, over the intermediate term, maintenance of the current ratings will require sustained earnings to replenish capitalization.

Allstate's total debt-to-adjusted capitalization is approximately 23%, which is expected to be reduced by year-end 2006 following the repayment of debt maturing in December 2006. Additionally, Allstate's ability to service its annual interest expense is strong with earnings coverage at approximately six times.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.