 |
|
|
|
Investments
Highlights
Allstate Investments, LLC is a wholly-owned
subsidiary of The Allstate Corporation responsible
for managing the invested assets of the principal
business units, Property-Liability and Allstate
Financial. Allstate Investments, LLC works
closely with Allstate’s business units
to design effective market and credit quality,
liquidity and asset allocation strategies
that will most effectively support their business
objectives. Allstate is a major investor in
many domestic securities markets and participates
in several international investment markets.
Working within a comprehensive risk management
framework, Allstate’s team of dedicated
investment professionals takes an active market
stance in pursuit of generating returns in
excess of appropriate benchmarks in support
of the Company’s overall financial objectives.
|
|
|
|
|
Asset
Allocation
Allstate’s consolidated allocation of
assets is designed to best support the needs
of its business units. Allstate’s portfolio
of invested assets is heavily weighted towards
fixed income securities. Fixed income securities
provide the most effective match to the business
units’ financial objectives while best
supporting Allstate policyholder claim payments.
The balanced allocation across both fixed
income and equity markets performed well during
the unique and volatile capital markets that
existed during 2002.
At Dec. 31, 2002:
|
|
 |
| |
Investment Growth
Consolidated investment balances increased
to $90.65 billion in 2002 from $79.88 billion
in 2001, or 13.5%, primarily due to increased
cash flows from growth in operations, as well
as increased unrealized gains in fixed income
assets generated in a lower interest rate
environment.
|
|
 |
| |
 |
|
Net Investment Income
Allstate’s consolidated Net investment
income for 2002 increased to $4.85 billion
from $4.80 billion in 2001, or 1.2%, primarily
due to higher investment balances, but partially
offset by lower yields on purchases of new
fixed income securities. Investment strategies
are focused on achieving consistent growth
in investment income within the context of
overall asset growth and available market
yields. |
| |
Fixed Income Portfolio Quality
Allstate’s fixed income portfolios are
both highly-diversified and of high quality.
On a consolidated basis, approximately 93%
of Allstate’s fixed income assets are
of investment grade quality. Allstate considers
a security investment grade when it has received
a rating from the National Association of
Insurance Commissioners of 1 or 2, a Moody’s
rating of Aaa, Aa, A or Baa, or a comparable
internal rating. The high quality nature of
the portfolios provide the foundation for
the risk management framework that best meets
each business unit’s financial objectives
and risk tolerance levels. |
|
 |
| |
Outlook
The continued presence of a soft economy,
geopolitical risks and historically low interest
rates will present a challenging investment
climate in 2003. Allstate believes a disciplined
approach to risk management and asset allocation
combined with an active management philosophy
will continue to serve Allstate well in the
coming year. |
|
|
|
|
