Allstate is engaged in an on-going evaluation of the subject of global climate change and natural catastrophes primarily as these factors relate to possible impacts on Allstate’s future risk exposures, including hurricanes.

We’re looking at advanced risk models that consider multiple catastrophic events, along with environmental factors such as warmer waters and changes in accident frequency/severity patterns. As part of our catastrophe management and risk mitigation efforts, Allstate is involved with a coalition called ProtectingAmerica.org which is working on solutions that would better protect local communities and our national economy from weather-related and other catastrophes. We have also taken a number of actions to make our own company less vulnerable to the devastating effects of catastrophes. In 2006 Allstate purchased over $800 million in reinsurance – the “insurance for an insurance company” – to offset some of our catastrophe risk. We also revised some of our homeowner insurance policies and decided not to renew others in areas of especially high weather-related risk. Wherever possible, Allstate helped customers impacted by those decisions find coverage through another insurance carrier.

As a rule, Allstate management keeps abreast of the ongoing scientific and hurricane modeling research through regular discussions with premiere hurricane modelers. We rely on this research from modelers to help us make pricing and risk management decisions. Allstate will continue to encourage these modelers to monitor the scientific studies of climate change and to consider whether their models should be adjusted as new data from those studies continues to emerge.