Now we're at work on some of the most important initiatives Allstate has ever undertaken—strengthening our core operations and expanding the scope of our business. That work has been our chief focus for several years, and was greatly accelerated in 1999 with the announcement that we are adding new access points to the company in order to tap new channels of growth. Beginning in mid-year 2000, insurance consumers in some states will be able to get rate quotes, buy insurance, modify existing coverage and get questions answered over the Internet or through a toll-free phone number with a licensed Client Insurance Professional. Consumers will have round-the-clock access to licensed Allstate professionals.

And regardless of whether consumers choose to buy or service their Allstate business online or over the phone, they'll always be able to tap the advice, expertise and experience of a local Allstate agent. This degree of customer flexibility and convenience will be a major competitive advantage for us. It's a demonstration of our willingness, ability and commitment to satisfy customer needs through innovation and industry leadership.

And make no mistake, it is a major commitment. By year-end 2000 our goal is to have Internet and phone access service in place in 15 states covering about 40 percent of the U.S. population. By the end of 2001, we plan to provide this service countrywide, everywhere Allstate does business in the United States.

Not only is this good for insurance consumers, it's good for our agencies—Allstate's 15,500 agents and their support staffs. They'll be able to tap into a growing number of consumers predisposed to buy or service their insurance needs directly online or through 24-hour Client Information Centers. Agents will get a commission for servicing that business and additional commissions for cross-selling new lines of business with these customers.

To help agencies better sell and service customers, we're making another major commitment. By the end of 2001, we'll equip all Allstate agents and many of their support staffs with new desktop hardware and software. And we're introducing leading-edge technology to help agencies target and service consumers with significant insurance needs, identify and retain their most valuable customers, and prospect more effectively for new leads.

For example, Allstate agencies will be able to identify new teen drivers easily from their customer base and offer those families the right auto coverage as well as our award-winning safe driving materials. Agencies will be able to target other customers with pressing insurance needs, such as new homeowners and retirees. We'll also identify customers deemed to be at risk of not renewing, so agencies can target them for special attention. With thousands of individuals covered in each agency¹s book of business, these targeted actions can make a huge difference in strengthening individual relationships, improving customer loyalty and cross-line sales and increasing retention.

Another new program will allow our agencies to view their customers by household, consolidating and refining information to provide a more comprehensive profile of every customer family. And sophisticated new pricing models and marketing programs will enable us to identify and offer more attractive rates to our most potentially profitable consumer segments.