<PAGE>
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) April 20, 2000
The Allstate Corporation
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-11840 36-3871531
- ----------------- ---------------- -----------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
2775 Sanders Road, Northbrook, Illinois 60062
- ------------------------------------------- -------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (847) 402-5000
--------------
Page 1 of 17
Exhibit Index at page 4
<PAGE>
Item 5. OTHER EVENTS
On April 20, 2000, the Registrant issued the press release attached hereto
as Exhibit 99.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
99 Registrant's press release dated
April 20, 2000
</TABLE>
Page 2 of 17
<PAGE>
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.
THE ALLSTATE CORPORATION
By /s/ Samuel H. Pilch
-------------------
Name: Samuel H. Pilch
Title: Controller
April 26, 2000
Page 3 of 17
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Page
Number Description Number
- ------ ----------- ------
<S> <C> <C>
99 Registrant's press release dated 5
April 20, 2000
</TABLE>
Page 4 of 17
<PAGE>
Exhibit No. 99
THE ALLSTATE CORPORATION
NEWS
For More Information:
Jim Dudas
Allstate Media Relations
(847) 402-4396
Robert Block
Phil Dorn
Investor Relations
(847) 402-2800
FOR IMMEDIATE RELEASE
ALLSTATE REPORTS 2000 FIRST QUARTER RESULTS
NORTHBROOK, IL, April 20, 2000 -- The Allstate Corporation (NYSE: ALL)
today reported that consolidated revenues for the first quarter of 2000
increased 7.0 percent to $7.29 billion from $6.81 billion for the same period in
1999. The growth was driven by increases in the Personal Property and Casualty
and the Life and Savings business units, partially offset by decreased realized
capital gains as compared to the same quarter in 1999.
Before the impact of restructuring charges, operating income for the
quarter was $481 million ($0.62 per diluted share) compared to $663 million
($0.81 per diluted share) for the same period in 1999, as increased premiums
were offset by unseasonably higher catastrophe losses from multiple storms
occurring during the quarter. Catastrophe losses for the quarter were $248
million after-tax ($0.32 per diluted share) versus $82 million after-tax ($0.10
per diluted share) during the first quarter of 1999. After the impact of
restructuring charges, operating income was $463 million ($0.60 per diluted
share) for the quarter ended March 31, 2000.
Consolidated net income for the quarter was $561 million or $0.73 per
diluted share, compared to $1.04 billion or $1.27 per diluted share for the same
period in 1999, reflecting primarily the impact of higher catastrophe losses and
decreased realized capital gains.
"The number and severity of storms during the quarter, especially across
the southern states, was unusual," said Chairman, President and CEO Edward M.
Liddy. "Catastrophe losses in the first quarter were the highest since the first
quarter of 1994, which included losses from the Northridge earthquake in
California.
Page 5 of 17
<PAGE>
"However, the fundamentals of the business remain strong, and during the
quarter we made good progress on the implementation of the strategic initiatives
introduced during 1999.
"The integration of CNA Personal Lines (CNA) and American Heritage Life
(AHL) is proceeding on target and both operations are contributing positive
growth and revenues," said Liddy. "AHL has begun to leverage the strength of the
Allstate brand association and the Allstate agency channel, with positive
initial acceptance. CNA has maintained its market presence in the independent
agency channel, and has begun to develop new capabilities in the distribution
area with a more sophisticated technology to support its agents.
"The development of our multi-access strategy for Allstate property and
casualty is on schedule, with the opening of our first client information center
and enhanced Internet capabilities scheduled for later this month. As announced
in November, we will begin the rollout of the first phase of our multi-access
strategy in Oregon during the first week of May, and will progressively be
adding new functionality as the rollout continues.
"The expense savings initiatives announced in November were on plan for the
quarter and the reorganization of our multiple employee agency programs into
Allstate's single exclusive agency program continues. Production continues to be
strong, and present indications are that the reorganization will proceed
smoothly.
"In the Life and Savings operation, total premiums and revenues continue to
show strong positive growth, as a result of the continuing expansion of products
and distribution channels. Management is committed to continuing to evolve its
product and distribution mix to meet customers' needs and preferences, and the
recent introduction of a dedicated marketing unit in Life and Savings will help
achieve this strategy.
"We remain confident that the strategies Allstate introduced last year are
the right ones for the future, and we are concentrating on executing them
superbly - on time and on budget. The results for the first quarter are
encouraging and show that the execution phase is going well."
Page 6 of 17
<PAGE>
PROPERTY-LIABILITY BUSINESS
Property-Liability written premiums for the first quarter of 2000 increased
11.2 percent to $5.38 billion versus $4.84 billion during the same period of
1999. Higher written premiums during the quarter reflect an increase from the
CNA personal lines acquisition and increased unit sales of auto and homeowners
policies. Excluding the impacts of CNA and the New Jersey rate reform, written
premiums increased 3.4 percent over the first quarter of 1999 to $4.81 billion.
For the first quarter of 2000, total Property-Liability revenues increased
4.8 percent to $6.08 billion, compared to 1999 first quarter revenues of $5.80
billion. Before the impact of the restructuring charges, Property-Liability
operating income for the first quarter of 2000 was $359 million versus 1999
first quarter operating income of $574 million, reflecting unseasonably higher
catastrophe losses from multiple storms during the quarter, and increased auto
loss costs. Auto loss costs were impacted by higher frequency, and increased
severity due to inflationary pressures in medical and auto repair costs.
Property-Liability operating income after the effects of restructuring was $342
million for the quarter. The combined ratio for the quarter was 99.7, although
excluding catastrophe losses and restructuring charges the combined ratio was
92.2. Realized capital gains were $119 million after-tax in the first quarter of
2000, compared to $344 million after-tax for the same period in 1999. Net income
in the Property-Liability segment was $461 million for the first quarter of
2000, compared to $918 million for the same period in the previous year.
LIFE AND SAVINGS BUSINESS
For the first quarter of 2000, Life and Savings statutory premiums and
deposits increased 99.1 percent to $3.01 billion compared to $1.51 billion in
the first quarter of 1999. The increase was primarily due to growth in variable
annuity sales, including sales from the one-year-old alliance with Putnam
Investments, and increased fixed annuity sales.
Page 7 of 17
<PAGE>
Life and Savings revenues were $1.20 billion for the first quarter,
compared to $990 million for the same period in the previous year as annuity
sales contributed significantly to growth. Life and Savings operating income for
the quarter was $127 million compared to $99 million for the same period in
1999, due to increased variable annuity fees and favorable mortality results
during the quarter. Net income for the first quarter of 2000 was $131 million
versus $136 million in the same period of 1999, due to lower realized capital
gains.
The Allstate Corporation is the nation's largest publicly held personal
lines insurance company. Its main business units include Allstate Personal
Property and Casualty, which provides insurance for more than 14 million
households and has approximately 15,500 exclusive agencies in the U.S. and
Canada, and Allstate Life and Savings, which markets a number of life insurance
and savings products under a variety of brands through a number of channels and
is the nation's 17th largest life insurance business. The company's Independent
Agency Markets unit sells personal property and casualty insurance through a
network of 21,000 independent agencies across the country. Allstate maintains a
website at www.allstate.com.
# # #
Page 8 of 17
<PAGE>
THIS DOCUMENT CONTAINS FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT'S
ESTIMATES, ASSUMPTIONS AND PROJECTIONS. THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995 PROVIDES A SAFE HARBOR UNDER THE SECURITIES ACT OF 1933 AND THE
SECURITIES EXCHANGE ACT OF 1934 FOR FORWARD-LOOKING STATEMENTS. IN ORDER TO
COMPLY WITH THE TERMS OF THE SAFE HARBOR, ALLSTATE NOTES THE FOLLOWING: (1) ITS
ABILITY TO IMPLEMENT ITS TIER-BASED PRICING MODEL IS SUBJECT TO STATE
REGULATION; (2) THE PROGRAMS IT HAS IMPLEMENTED TO ADDRESS ADVERSE PROFITABILITY
TRENDS IN ITS NON-STANDARD AUTO INSURANCE BUSINESS MAY HAVE A TEMPORARY ADVERSE
IMPACT ON WRITTEN PREMIUM GROWTH; (3) THE SUCCESS OF THE MULTI-ACCESS
DISTRIBUTION MODEL MAY BE ADVERSELY AFFECTED BY THE LIMITED POOL OF INDIVIDUALS
SUITED AND TRAINED TO DO SUCH WORK IN ANY GEOGRAPHIC AREA, PARTICULARLY IN LIGHT
OF THE CURRENT LOW UNEMPLOYMENT RATE; (4) THE EXPENSE SAVINGS INITIATIVE IS
DEPENDENT ON, AMONG OTHER THINGS, THE AGENCY PROGRAM REORGANIZATION; AND (5) THE
AGENCY PROGRAM REORGANIZATION AND ASPECTS OF THE MULTI-ACCESS DISTRIBUTION MODEL
ARE DEPENDENT UPON ALLSTATE'S ABILITY TO ADAPT CURRENT COMPUTER SYSTEMS AND TO
DEVELOP AND IMPLEMENT NEW SYSTEMS.
Page 9 of 17
<PAGE>
SUMMARY OF RESULTS FOR THE QUARTER ENDED MARCH 31, 2000
Consolidated Highlights
($ in millions, except per-share amounts)
<TABLE>
<CAPTION>
Quarter Ended
March 31
---------------------------------
Est.
2000 1999 Change
$ $ %
<S> <C> <C> <C>
Consolidated Revenues 7,286 6,807 7.0
Operating Income before
Restructuring Charges 481 663 (27.5)
Operating Income Per
Share (Diluted) before
Restructuring Charges .62 .81 (23.5)
Restructuring Charges After-tax 18 -- --
Operating Income 463 663 (30.2)
Operating Income Per Share(Diluted) .60 .81 (25.9)
Realized Capital Gains After-tax 109 381 (71.4)
Dividends on Preferred Securities
of Subsidiary Trusts (11) (9) 22.2
Net Income 561 1,035 (45.8)
Net Income Per Share(Diluted) .73 1.27 (42.5)
Weighted Average Shares
Outstanding (Diluted) 772.1 817.0 (5.5)
</TABLE>
- - For the first quarter of 2000, consolidated revenues increased to $7.3
billion, an increase of 7.0 percent over the first quarter of 1999.
- - Property-Liability written premiums increased 11.2 percent to $5.4 billion
during the quarter versus $4.8 billion during the same period in 1999, due
in part to policies in force growth of 3.0 percent over the first quarter
of last year. Excluding the impacts of CNA and the New Jersey rate reform,
written premiums increased 3.4 percent over the first quarter of 1999 to
$4.81 billion.
- - Life and Savings statutory premiums and deposits increased 99.1 percent as
variable annuity sales were up 157.3 percent and fixed annuity sales were
up 121.2 percent during the quarter as compared to the first quarter of
1999.
- - Consolidated operating income before the impact of restructuring was $481
million or $.62 per share, on a diluted basis. Consolidated operating
income, including the effects of restructuring was $463 million or $.60 per
diluted share. Prior year first quarter operating income was $663 million
or $.81 per diluted share. Operating income decreased during the quarter as
increased premiums were offset by higher catastrophe losses.
Page 10 of 17
<PAGE>
- - During the first quarter of 2000, the company acquired approximately 37
million shares of its stock, at a cost of $794 million, as part of its
stock repurchase program.
Property-Liability Highlights
($ in millions, except ratios)
<TABLE>
<CAPTION>
Quarter Ended
March 31
---------------------------------
Est.
2000 1999 Change
$ $ %
<S> <C> <C> <C>
Property-Liability
Premiums Written 5,379 4,839 11.2
Property-Liability Revenues 6,079 5,802 4.8
Operating Income before
Restructuring Charges 359 574 (37.5)
Restructuring Charges After-tax 17 -- --
Operating Income 342 574 (40.4)
Realized Capital Gains After-tax 119 344 (65.4)
Net Income 461 918 (49.8)
Catastrophes After-tax 248 82 --
Combined Ratio before impacts
of catastrophes and
restructuring charges 92.2 89.9 2.3pts
Impact of catastrophes 7.0 2.6 4.4pts
Impact of restructuring .5 -- .5pts
Combined Ratio 99.7 92.5 7.2pts
</TABLE>
Life and Savings Highlights
($ in millions)
<TABLE>
<CAPTION>
Quarter Ended
March 31
---------------------------------
Est.
2000 1999 Change
$ $ %
<S> <C> <C> <C>
Statutory Premiums and Deposits 3,009 1,511 99.1
Life and Savings GAAP Revenues 1,200 990 21.2
Operating Income before
Restructuring Charges 128 99 29.3
Restructuring Charges After-tax 1 -- --
Operating Income 127 99 28.3
Realized Capital Gains After-tax 4 37 (89.2)
Net Income 131 136 (3.7)
Investment including Separate
Accounts 50,875 42,554 19.6
</TABLE>
Page 11 of 17
<PAGE>
THE ALLSTATE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended March 31
Est. Percent
($ in millions except per share data) 2000 1999 Change
------- ------- -------
<S> <C> <C> <C>
REVENUES
Property-liability insurance premiums $ 5,471 $ 4,852 12.8
Life and annuity premiums
and contract charges 541 385 40.5
Net investment income 1,090 971 12.3
Realized capital gains and losses 184 599 (69.3)
------- -------
Total revenues 7,286 6,807 7.0
------- -------
COSTS AND EXPENSES
Property-liability insurance
claims and claims expense 4,138 3,321 24.6
Life and annuity contract benefits 745 606 22.9
Amortization of deferred policy
acquisition costs 890 793 12.2
Operating costs and expenses 650 552 17.8
Restructuring charges 28 - -
Interest expense 47 30 56.7
------- -------
Total costs and expenses 6,498 5,302 22.6
------- -------
Income from operations before income
tax expense and dividends on
preferred securities 788 1,505 (47.6)
Income tax expense 216 461 (53.1)
------- -------
Income before dividends on preferred
securities 572 1,044 (45.2)
Dividends on preferred securities
of subsidiary trusts (11) (9) 22.2
------- -------
Net income $ 561 $ 1,035 (45.8)
======= =======
Net income per share - Diluted $ 0.73 $ 1.27
======= =======
Weighted average shares - Diluted 772.1 817.0
======= =======
Net income per share - Basic $ 0.73 $ 1.27
======= =======
Weighted average shares - Basic 767.6 813.6
======= =======
</TABLE>
Page 12 of 17
<PAGE>
THE ALLSTATE CORPORATION
CONTRIBUTION TO INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------
Est. Percent
($ in millions except per share data) 2000 1999 Change
------- --------- -------
<S> <C> <C> <C>
CONTRIBUTION TO INCOME
Operating income $ 463 $ 663 (30.2)
Realized capital gains and losses 109 381 (71.4)
Dividends on preferred securities
of subsidiary trusts (11) (9) 22.2
------- ---------
Net income $ 561 $ 1,035 (45.8)
======= =========
Operating income before the impact of
restructuring charges $ 481 $ 663 (27.5)
======= =========
INCOME PER SHARE (DILUTED)
Operating income $ 0.60 $ 0.81 (25.9)
Realized capital gains and losses 0.14 0.47 (70.2)
Dividends on preferred securities
of subsidiary trusts (0.01) (0.01) -
------- ---------
Net income $ 0.73 $ 1.27 (42.5)
======= =========
Operating income before the impact of
restructuring charges $ 0.62 $ 0.81 (23.5)
======= =========
BOOK VALUE PER SHARE - DILUTED $ 21.72 $ 21.37
======= =========
</TABLE>
Page 13 of 17
<PAGE>
THE ALLSTATE CORPORATION
SUPPLEMENTARY INFORMATION
<TABLE>
<CAPTION>
Three Months Ended
March 31,
Est.
($ in millions) 2000 1999
------- --------
<S> <C> <C>
PROPERTY-LIABILITY
Premiums written $ 5,379 $ 4,839
======== ========
Premiums earned $ 5,471 $ 4,852
Claims and claims expense 4,138 3,321
Operating costs and expenses 1,290 1,165
Restructuring charges 26 -
-------- --------
Underwriting income 17 366
-------- --------
Net investment income 424 420
Income tax expense on operations 99 212
-------- --------
Operating income 342 574
Realized capital gains and losses, after-tax 119 344
-------- --------
Net income $ 461 $ 918
======== ========
Catastrophe losses $ 382 $ 126
======== ========
Operating ratios
Claims and claims expense ratio 75.6 68.5
Expense ratio 24.1 24.0
-------- --------
Combined ratio 99.7 92.5
======== ========
Effect of catastrophe losses on combined ratio 7.0 2.6
======== ========
Effect of restructuring charges on combined ratio 0.5 -
======== ========
LIFE AND SAVINGS
Statutory premiums and deposits $ 3,009 $ 1,511
======== ========
Investments including Separate Account assets $ 50,875 $ 42,554
======== ========
Premiums and contract charges $ 541 $ 385
Net investment income 637 536
Contract benefits 745 606
Operating costs and expenses 235 163
Restructuring charges 2 -
Income tax expense on operations 69 53
-------- --------
Operating income 127 99
Realized capital gains and losses, after-tax 4 37
-------- --------
Net income $ 131 $ 136
======== ========
</TABLE>
Page 14 of 17
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
Est.
($ in millions) 2000 1999
------- --------
<S> <C> <C>
CORPORATE AND OTHER
Operating loss $ (6) $ (10)
Realized capital gains and losses, after-tax (14) -
Dividends on preferred securities
of subsidiary trusts (11) (9)
--------- ---------
Net loss $ (31) $ (19)
========= =========
</TABLE>
Page 15 of 17
<PAGE>
THE ALLSTATE CORPORATION
UNDERWRITING RESULTS BY AREA OF BUSINESS
<TABLE>
<CAPTION>
Three Months Ended
($ in millions) March 31,
---------------------
Est. Percent
2000 1999 Change
------- ------- -------
<S> <C> <C> <C>
CONSOLIDATED UNDERWRITING SUMMARY
PP&C $ 22 $ 367 (94.0)
Discontinued lines and coverages (5) (1) -
------- -------
Underwriting income $ 17 $ 366 (95.4)
======= =======
PP&C UNDERWRITING SUMMARY
Premiums written $ 5,379 $ 4,832 11.3
======= =======
Premiums earned $ 5,470 $ 4,845 12.9
Claims and claims expense 4,134 3,318 24.6
Other costs and expenses 1,288 1,160 11.0
Restructuring charges 26 - -
------- -------
Underwriting income $ 22 $ 367 (94.0)
======= =======
Catastrophe losses $ 382 $ 126 203.2
======= =======
Operating ratios
Claims and claims expense ratio 75.6 68.5
Expense ratio 24.0 23.9
------- -------
Combined ratio 99.6 92.4
======= =======
Effect of catastrophe losses
on combined ratio 7.0 2.6
======= =======
Effect of restructuring charges
on combined ratio 0.5 -
======= =======
DISCONTINUED LINES AND COVERAGES
UNDERWRITING SUMMARY
Premiums written $ - $ 7 -
======= =======
Premiums earned $ 1 $ 7 -
Claims and claims expense 4 3 33.3
Other costs and expenses 2 5 (60.0)
------- -------
Underwriting loss $ (5) $ (1) -
======= =======
</TABLE>
Page 16 of 17
<PAGE>
THE ALLSTATE CORPORATION
PROPERTY-LIABILITY PREMIUMS WRITTEN BY MARKET SEGMENT
($ IN MILLIONS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------------
2000 1999 Change
$ $ %
---- ---- ------
<S> <C> <C> <C>
PP&C
Preferred, standard and other voluntary automobile $3,162 $2,827 11.9
Non-standard/specialty automobile 876 859 2.0
Involuntary automobile 13 23 (43.5)
Commercial lines 169 154 9.7
Homeowners 864 700 23.4
Other personal lines 295 269 9.7
------ ------
5,379 4,832 11.3
------ ------
DISCONTINUED LINES AND COVERAGES - 7 -
------ ------
TOTAL $5,379 $4,839 11.2
====== ======
</TABLE>
Page 17 of 17
