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Premiums and deposits increased to
$11.83 billion in 2002 from $10.61 billion
in 2001 due to an increase in fixed annuity
sales and an increase in deposits at the Allstate
Bank. These increases were partially offset
by a significant decline in sales of institutional
products reflecting unfavorable credit market
conditions, and variable annuities caused
by poor equity market performance.
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Net income for Allstate Financial declined
to a loss of $22 million in 2002 from Net
income of $363 million in 2001. This decrease
was the result of the Cumulative effect of
a change in accounting principle and higher
realized capital losses in 2002 compared to
2001. |
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Operating income for Allstate Financial
increased to $556 million in 2002 from $527
million in 2001. This increase was due to
new product sales, management actions to improve
the gross investment margin, which is the
margin earned on investments in excess of
interest credited on policies, adjustments
for prior year tax liabilities and the elimination
of goodwill amortization due to an accounting
change. These increases were partly offset
by higher Amortization of deferred policy
acquisition costs related to variable annuities
resulting from the equity market environment
during 2002, and increased Operating costs
and expenses.
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Outlook Allstate Financial will continue
to manage its investment margin to maintain
profitable spreads between investment yields
and interest crediting rates on its inforce
products. Management will also continue to
evaluate the investment environment and manage
product pricing to ensure that new product
sales generate acceptable returns. Allstate
Financial will continue to strengthen its
relationships within its current distribution
channels by enhancing its focus on key distribution
partners and Allstate agents. |
