Allstate Financial Group Ratings Affirmed; Outlook Stable.

Business Editors

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

Credit Rating:AA/Stable/A-1+

On Jan. 30, 2004, Standard & Poor's Rating Services affirmed its 'AA' counterparty credit and financial strength ratings on members of the Allstate Financial Group (collectively referred to as Allstate Financial; see ratings list).

The outlook on these ratings is stable.

The ratings affirmation reflects the breadth and depth of Allstate Financial's product and distribution capabilities as well as its strong brand name recognition, conservative capitalization, and strategic importance to parent, Allstate Insurance Co. (ALIC). Partially offsetting these strengths are the challenges associated with revenue and earnings growth in the highly competitive retail insurance segments and earnings sensitivity associated with interest rate levels and equity market performance.

Outlook

Life insurance and annuity sales will be consistent with industry averages. Capital is expected to remain extremely strong, with capital adequacy levels maintained at more than 180%. GAAP operating earnings declined in 2003 due to spread compression but are expected to improve with more favorable economic conditions in line with peers with similar product mixes and ratings.

Major Rating Factors

-- Very strong product and distribution capabilities. Management

has successfully built an organization around multiple

distribution channels that provides retirement, savings, and

financial protection solutions for middle-market/affluent

consumers in the U.S. Premiums and deposits have increased

consistently in the past two years, with new sales through

Sept. 30, 2003, continuing to trend up. Having a broad product

and distribution mix enables the company to meet a number of

consumer needs and increases the opportunity to cross-sell

once the initial business relationship has been established.

As a result, the organization is highly diversified by product

and distribution but lacks the scale or market-leadership of

some prominent competitors.

-- Allstate Financial directly benefits from the significant

financial resources of its parent, ALIC, which has given the

organization the time and resources to develop a broad mix of

products and distribution partners. In addition, ALIC's strong

brand-name recognition presents the organization with an

opportunity to sell additional product to more than 16 million

U.S. households. Allstate Financial is an important area of

potential growth and earnings diversification for the parent.

As a result, the ratings are inextricably linked to the

ratings on ALIC, as a core member of its parent, The Allstate

Corp.

-- Allstate Financial's earnings are very strong and diversified;

reflecting strong fundamentals in spread and expense

management. As of Sept. 30, 2003, operating earnings were

adversely affected by volatile equity market returns, effects

of low interest rates on reinvestment yields, accelerated

amortization of deferred acquisition charges (DAC) in the

first quarter, primarily related to variable annuities (DAC

unlocking), and competition. Standard & Poor's expects the low

interest rate environment will become less of a concern for

Allstate Financial and the industry at large as the economy

and market conditions improve.

-- Capitalization is considered extremely strong. Allstate

Financial's capital adequacy ratio (CAR) as measured by

Standard & Poor's model was 197% in 2002, with 2003 expected

to remain within the extremely strong range.

-- High quality investments. Allstate Financial's investment

portfolio is of high quality and has performed strongly

despite the recent difficult environment. The portfolio is

well constructed, striking a good balance between risk

tolerance and the company's long-term return objectives.

Credit risk is moderate with 93% of the fixed-income portfolio

held in investment-grade securities. Equity exposure is modest

at less than 3% of total invested assets.

-- Liquidity is considered very strong. Allstate Financial's

liquidity ratio was 222% at year-end 2002, based on Standard &

Poor's liquidity model.

Ratings List

Allstate Life Insurance Co.
  Counterparty credit rating             AA/Stable/A-1+
  Financial strength rating              AA/Stable/A-1+

Allstate Life Insurance Co. of New York
Glenbrook Life & Annuity Co.
Lincoln Benefit Life Co.
Surety Life Insurance Co.
American Heritage Life Insurance Co.
   Counterparty credit rating            AA/Stable/--
   Financial strength rating             AA/Stable

Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Credit Ratings Lists. Standard & Poor's ratings appear alphabetically.