Investment and Asset Management

Ensuring that we fulfill our commitment to our customers, employees and shareholders means making sound investment decisions that position us to deliver the services and value these stakeholders have come to expect. Our investment strategy focuses on security for today and growth for tomorrow.

Returns on our investment portfolios are an important component of our financial results. Our seasoned investment team combines its specialized knowledge with sophisticated economic forecasting tools and a strategic asset allocation approach that considers the nature of our liabilities and risk tolerances, as well as the risk and return parameters of the asset classes in which we invest.

One area of continued focus is municipal bonds. As of December 31, 2012, Allstate held approximately $13 billion in bonds that help improve infrastructure and extend vital services in communities across the country. The portfolio is actively managed and well-diversified among states and sectors. Major holdings include bonds that help fund primary and secondary schools, public and private universities, hospitals, single and multi-family housing programs, green energy projects—such as hydroelectric and wind-generated power plants—police and fire stations, libraries and community buildings, and Economic Development Projects.

As of year-end 2012, Allstate had made financial commitments of $780 million to projects developed through Low-Income Housing Tax Credits (LIHTC), a federal program designed to provide federal tax incentives to develop or rehabilitate affordable housing for low-income families, seniors and individuals with disabilities. To date, our investments have helped develop 743 affordable housing complexes with more than 60,000 apartment units in urban, suburban and rural locations across the United States while providing solid investment returns.

As a committed corporate citizen, Allstate makes significant contributions to our communities and works to make our neighborhoods and our nation better and safer places within which to live. Allstate invests in communities through a number of organizations, including the Local Initiatives Support Corporation (LISC) and Impact Community Capital.

Local Initiatives Support Corporation (LISC) is a national nonprofit that invests almost $1 billion each year in low-income neighborhoods. Allstate and LISC have been strong partners for nearly 20 years. Since 1993, Allstate has invested $92 million in LISC and affiliates:

  • $570,000 in grants
  • $24.4 million in loans
  • $66.8 million in equity to National Equity Fund affiliate

Allstate’s financial support has helped develop affordable housing, charter schools and health facilities, and facilitate LISC’s dedicated efforts in helping community residents transform distressed neighborhoods into healthy and sustainable communities of choice and opportunity—in short, good places to work, do business and raise children. LISC, along with its community partners, has opened 68 Financial Opportunity Centers in 22 cities across the country. Each center offers three core services: access to jobs, public benefits and financial education. With support from the White House, this model is growing rapidly because of its proven effectiveness.

Impact Community Capital was founded by Allstate and other leading insurance companies in 1998 to facilitate investment in California’s communities. Impact focuses on financing affordable housing and community facilities to benefit lower-income individuals, families and communities while meeting insurer requirements for the prudent management of policyholder funds. The organization has funded $750 million to construct or refurbish more than 10,000 affordable housing units, and has invested nearly $80 million in childcare and healthcare facilities serving more than 250 low-income children and 350,000 low-income patient visits annually.

Allstate is using its resources to make a difference where it is needed most. In today’s uncertain economic climate, such targeted investments are more critical than ever. At the end of 2012, Allstate’s Social Responsibility Investment Portfolio had a book value of approximately $71.5 million.

Investment Restrictions

Allstate has a policy to exclude certain kinds of investments. For example, we do not:

  • Directly invest in tobacco companies
  • Directly invest in liquor companies
  • Invest in countries, governments, organizations and individuals specified by the Office of Foreign Assets Control

Additional information can be found in Allstate’s 2012 Annual Report.

Vicetoy Hotel

ECC Monitor: OK