But who are our customers? They are teachers, firefighters, professionals from all walks of life. Mostly they are middle-income Americans who want and need better protection and retirement planning. Many have been ignored or intimidated by traditional financial services companies. And with relationships with one out of six American households, Allstate is in a unique position to help them achieve financial security.

Our focus is clear. Allstate does not want to be all things to all people in financial services. We want to be more things to more people. So we don’t plan on being a player in the consumer finance or brokerage businesses, for example. Instead we focus on areas adjacent to our existing business – asset protection, asset accumulation and life insurance and savings.

Within our overall customer base, we likewise focus on an underserved segment of the financial services marketplace. Households earning between $30,000 and $100,000 a year have an aggregate income of $3.1 trillion. Like most Americans, they want to build assets for a home, for college education and especially for retirement.

Our protection business gives Allstate a great place to start – because of our brand name and large customer base. Also, because insuring assets like homes and cars is the first step toward financial security. But to build on that base for the future, we must make the most of our existing customer relationships.

That’s where our Allstate agencies play a critical role. They have answered the challenge and broadened their expertise. More than half have studied, tested and are licensed to sell a broad range of financial products. We call them Personal Financial Representatives. More than a third also regularly partner with Allstate’s Exclusive Financial Specialists (EFS) – more than 1,000 professionals who focus solely on life insurance and financial, rather than property/casualty, products.

The strategy is already working. New sales of financial products by Allstate exclusive agencies (5) reached $1.6 billion in 2002 – more than in the three previous years combined.

In addition to life insurance, annuities and mutual funds, we offer insured savings accounts, certificates of deposit, insured money-market accounts and other savings and lending products through our Allstate Bank. Deposits have grown rapidly, reaching $610 million in less than 18 months. It’s one more way we’re reaching customers with new solutions that fit their financial futures.

Chairman’s Message
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