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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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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) October 8, 1996
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)
Allstate Plaza, Northbrook, Illinois 60062
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (847) 402-6075
Page 1 of 6
Exhibit Index at page 4
Item 5. Other Events
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On October 8, 1996, the Registrant issued the press release attached
hereto as Exhibit 99.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
Exhibit No. Description
- - ---------- ------------
99 Registrant's press release dated
October 8, 1996.
Page 2 of 6
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
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Samuel H. Pilch
Controller
October 8, 1996
Page 3 of 6
Index to Exhibits
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Sequential
Page
Number Description Number
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99 Registrant's press release dated
October 8, 1996 5
Page 4 of 6
Allstate Insurance Company Exhibit No. 99
NEWS
FOR MORE INFORMATION
Allstate Media Relations
847-402-5600
FOR IMMEDIATE RELEASE
ALLSTATE STRENGTHENS RESERVES
NORTHBROOK, Ill., October 8, 1996 -- The Allstate Corporation (NYSE: ALL) today
announced that it will increase net loss reserves for discontinued lines and
coverages by $405 million, based on the results of a previously disclosed study
the company conducted of its environmental liabilities as well as a
comprehensive internal assessment of its asbestos and other contractual
liabilities related to other discontinued lines and coverages. An after-tax
charge for the increased loss reserves of $262 million, or 58 cents per share,
will be recorded in the third quarter.
The reserve strengthening relates to lines and coverages that Allstate
previously discontinued. These consist of excess and surplus insurance,
reinsurance and mortgage pool business, which the company no longer writes. The
company said that asbestos loss reserves will be increased by approximately $75
million and environmental loss reserves by $170 million, bringing total net A&E
reserves to approximately $1.2 billion. It also said that loss reserves for
other latent exposures and run-off businesses will be increased by $160 million.
"This action to strengthen our reserves follows several repositioning
activities we've recently undertaken to enhance our financial position and focus
on the company's core businesses of auto, home and life insurance," said
Allstate Chairman and Chief Executive Officer Jerry Choate. "In the past year,
Allstate has sold those operations that do not fit with our strategic direction,
and set in motion programs to reduce our catastrophe exposure in California and
Florida."
-more-
Page 5 of 6
ALLSTATE RESERVES/PAGE 2
Management believes its reserves for environmental and asbestos
coverages are appropriately established based on available facts, technology,
laws and regulations. However, due to the inconsistencies of court coverage
decisions, plaintiffs' expanded theories of liability, the risks inherent in
major litigation and other uncertainties, the ultimate cost of these claims may
vary materially from the amounts currently recorded, resulting in an increase in
loss reserves. Due to the uncertainties and factors described above, management
believes it is not practicable to develop a meaningful range for any such
additional reserves that may be required.
The Allstate Corporation, the parent of Allstate Insurance Company, is
the nation's largest publicly held personal lines insurance company, insuring
one of every eight homes and automobiles in the country. The company provides
insurance for more than 20 million customers and has approximately 15,000
full-time agents in the U.S. and Canada. Allstate is also a major life insurer.
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