Can the Insurance Industry Withstand a Major Catastrophe? Allstate CEO Addresses the Economic Impact of Catastrophes and Other Issues Facing Business.

LOS ANGELES -- In a speech to business leaders today at Town Hall Los Angeles, The Allstate Corporation (NYSE:ALL) Chairman, President and Chief Executive Officer Ed Liddy called for greater public and private sector dialogue toward protecting consumers in the wake of natural disaster, the abuse that exists in the lawsuit industry as well as the importance of asbestos and workers compensation reform.

The devastation of the tsunami destruction in Asia and east India, the wildfires that ravaged Southern California in 2003 and the Florida hurricanes demonstrate the devastation that can occur as a result of a natural disaster. Liddy warns that the current system is not prepared to handle the economic impact of a large natural disaster in California. He suggests that government and businesses work together to protect homeowners, only 14 percent of whom are covered by earthquake insurance.

"One recent model indicates damage from a repeat of the 1906 San Francisco earthquake would cost about $400 billion in economic losses," Liddy told business leaders at Town Hall Los Angeles. "With only 14 percent of California homeowners armed with earthquake insurance, the concern grows. Uninsured consumers whose life savings are tied up in homes and businesses would potentially be left with nothing."

In order to remedy the situation Liddy called for a greater dialogue and sharing of resources among stakeholders including governments, banks and insurance providers. Mr. Liddy challenged other industries to become involved, and reiterated that, "our industry stands ready to do its part."

Liddy also discussed the need for class action reform, and advocated using the momentum of recent federal and state government victories to abolish civil lawsuit abuse. One of his missions is "to dismantle a veritable lawsuit abuse industry that has imposed ever-increasing burdens on American businesses and consumers."

Liddy's speech concluded with the issue of asbestos and medical malpractice reforms. As many more American workers are expected to suffer from health issues caused by asbestos, he stressed the need to offer a fair solution to both victims and companies which reduce transaction costs, preserve resources and provide predictability to industries that eliminated the use of asbestos decades ago.

Following the speech, Mr. Liddy led a question and answer session with nine Crenshaw High School students participating in the Southern California Junior Achievement program. The session provided students with an opportunity to be exposed to and ask questions about the business world.

The Allstate Corporation (NYSE:ALL) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate(R)" slogan, Allstate helps individuals in approximately 17 million households protect what they have today and better prepare for tomorrow through approximately 13,600 exclusive agencies and financial professionals in the U.S. and Canada. Customers can access Allstate products and services such as auto insurance and homeowners insurance through Allstate agencies, or in select states at allstate.com and 1-800 Allstate(R). Encompass(SM) and Deerbrook(R) Insurance brand property and casualty products are sold exclusively through independent agents. Allstate Financial Group provides life and supplemental accident and health insurance, annuity, banking and retirement products designed for individual, institutional and worksite customers that are distributed through Allstate agencies, independent agencies, financial institutions and broker-dealers.