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Dear
Fellow Shareholders:
Last fall I visited Florida with Tom Wilson, president of our
Allstate Protection business. Four hurricanes had just ravaged
the state over six devastating weeks. As we viewed the overwhelming
damage, we knew that 2,300 claim adjusters were reaching out
to customers. At that moment, three thoughts came to mind. Insurance
plays a critical role in our lives. Scale and financial strength
really count in this business. And we know how to respond when
customers and communities need us most.
People come first. That’s Allstate’s stand.
We also know how to deliver reliable returns and profitable
growth for investors. In 2004 we set many performance records.
And over time, we’ve demonstrated that Allstate is an
exceptional investment because of the market we serve, the strategy
we’re successfully executing and the long-term value our
efforts create. Importantly, we understand the critical role
that careful capital management, responsible governance and
doing the right thing in our communities play in our ongoing
success.
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Edward M. Liddy
Chairman,
President and
Chief Executive Officer |
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| Making an informed investment decision is clear when
you understand how market focus and disciplined strategy create value.
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Allstate knows where the best market opportunities
exist. We’re executing a consistent strategy
to drive profitable growth. We’re acting with integrity
and investing our capital wisely. As a result, we’re creating
long-term value for shareholders. |
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2004 brought out the best in
Allstate. By meeting the challenges from nature and the marketplace,
we confirmed the value of our promise, our products and our
expertise. We also gave you a yardstick for measuring your company’s
capacity for profitable growth – even in the wake of unusually
severe catastrophes. Last year we incurred $17.8 billion in
total Property-Liability insurance claims and claims expense.
We generated $33.9 billion in total revenues – an all-time
high.
Net income per diluted share rose 18.5 percent to $4.54. Operating
income rose 16.1 percent to $3.1 billion and operating income
return on equity* was 17.0 percent. We raised the dividend paid
on our common stock by 22 percent, completed our repurchase
of $1.5 billion in stock a year ahead of schedule and announced
a new, two-year $4.0 billion share repurchase program.
These results and actions clearly demonstrate our determination
to use your capital effectively. The market responded favorably
as our stock price reached a then all-time high closing price
of $51.76 on December 30, 2004. (Continue Chairman’s Letter...)
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Measures we use that are not based on
generally accepted accounting principles (non-GAAP) are
defined and reconciled to the most directly comparable
GAAP measure, and operating measures we use are defined
in the “Definitions of Non-GAAP
and Operating Measures” section. |
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