SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

THE ALLSTATE CORPORATION
2775 Sanders Road
Northbrook, Illinois 60062-6127

March 26, 2001

Notice of Annual Meeting and Proxy Statement

Dear Stockholder:

    You are invited to attend Allstate's 2001 annual meeting of stockholders to be held on Tuesday, May 15, 2001. The meeting will be held at 11 a.m. in the Harris Bank Auditorium, 111 W. Monroe, Chicago, Illinois.

    Following this page are the following:

•

The notice of meeting



•

The proxy statement



•

Financial information about Allstate and management's discussion and analysis of Allstate's operations and financial condition

    Also enclosed are the following:

•

A proxy card/voting instruction form



•

A postage-paid envelope



•

Allstate's 2000 summary Annual Report

    Your vote is important. You may vote by telephone, internet or mail. Please use one of these methods to vote before the meeting even if you plan to attend the meeting.

Sincerely,



Edward M. Liddy
Chairman, President and
Chief Executive Officer

THE ALLSTATE CORPORATION
2775 Sanders Road
Northbrook, Illinois 60062-6127

March 26, 2001

Notice of Annual Meeting of Stockholders

    The annual meeting of stockholders of The Allstate Corporation will be held at the Harris Bank Auditorium which is located at 111 W. Monroe, Chicago, Illinois on Tuesday, May 15, 2001, at 11 a.m. for the following purposes:

1.

To elect to the Board of Directors thirteen directors to serve until the 2002 annual meeting



2.

To ratify the appointment of Deloitte & Touche LLP as Allstate's independent public accountants for 2001



3.

To approve Allstate's 2001 Equity Incentive Plan



4.

To consider a stockholder proposal for cumulative voting in elections of directors



5.

To consider a stockholder proposal for the endorsement of CERES Principles

    In addition, any other business properly presented may be acted upon at the meeting.

    Allstate began mailing this proxy statement and proxy cards/voting instruction forms to its stockholders and to participants in its profit sharing fund on March 26, 2001.

By Order of the Board,



Robert W. Pike
Secretary

Table of Contents

Proxy and Voting Information

Who is asking for your vote and why

    The annual meeting will be held only if a majority of the outstanding common stock entitled to vote is represented at the meeting. If you vote before the meeting or if you attend the meeting in person, your shares will be counted for the purpose of determining whether there is a quorum. To ensure that there will be a quorum, the Allstate Board of Directors is requesting that you vote before the meeting and allow your Allstate stock to be represented at the annual meeting by the proxies named on the enclosed proxy card/voting instruction form. Voting before the meeting will not prevent you from voting in person at the meeting. If you vote in person at the meeting, your previous vote will be automatically revoked.

Who can vote

    You are entitled to vote if you were a stockholder of record at the close of business on March 16, 2001. On March 16, 2001, there were 725,388,907 Allstate common shares outstanding and entitled to vote at the annual meeting.

How to vote

    If you hold your shares in your own name as a record holder, you may instruct the proxies how to vote your shares in any of the following ways:

•

By using the toll-free telephone number printed on the proxy card/voting instruction form



•

By using the internet voting site and instructions listed on the proxy card/voting instruction form



•

By signing and dating the proxy card/voting instruction form and mailing it in the enclosed postage-paid envelope to The Allstate Corporation, c/o First Chicago Trust Company, a division of EquiServe, P.O. Box 8010, Edison, NJ 08818-9007

    You may vote by telephone or internet 24 hours a day, seven days a week. If you vote using the internet, such votes are valid under Delaware law. If you hold your shares through a bank, broker, or other record holder, you may vote your shares by following the instructions they have provided.

How votes are counted and discretionary voting authority of proxies

    When you vote you may direct the proxies to withhold your votes from particular director nominees. With respect to each of the other items, you may vote "for" or "against," or you may "abstain" from voting.

    The thirteen nominees who receive the most votes will be elected to the open directorships even if they get less than a majority of the votes. For any other item to be ratified or approved, a majority of the shares present at the meeting and entitled to vote on the item must be voted in favor of it.

    Abstention with respect to any of items 2 through 5 will be counted as shares present at the meeting and will have the effect of a vote against the matter. Broker non-votes (that is, if the broker holding your shares in street name does not vote with respect to a proposal) and shares as to which proxy authority is withheld with respect to a particular matter will not be counted as shares voted on the matter and will have no effect on the outcome of the vote.

    If you use the telephone, the internet or the proxy card/voting instruction form to allow your shares to be represented at the annual meeting by the proxies but you do not give voting instructions, then the proxies will vote your shares as follows on the five matters set forth in this proxy statement:

•

For all of the nominees for director listed in this proxy statement



•

For the ratification of the appointment of Deloitte & Touche LLP as Allstate's independent public accountants for 2001



•

For the approval of Allstate's 2001 Equity Incentive Plan



•

Against the stockholder proposal for cumulative voting in elections of directors



•

Against the stockholder proposal relating to CERES Principles

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    Other than the five items set forth in this proxy statement, Allstate knows of no other matters to be brought before the meeting. If you use the telephone, the internet or the proxy card/voting instruction form to allow your shares to be represented at the annual meeting, the proxies may vote your shares in accordance with their judgment on any other matters presented at the meeting.

How to change your vote

    Before your shares have been voted at the annual meeting by the proxies, you may change or revoke your vote in the following ways:

•

Voting again by telephone, by internet or in writing



•

Attending the meeting and voting your shares in person

    Unless you attend the meeting and vote your shares in person, you should use the same method as when you first voted—telephone, internet or writing. That way, the inspectors of election will be able to identify your latest vote.

    If your shares are held in the name of a bank, broker or other record holder and you plan to attend the meeting, please bring proof of ownership that documents your right to attend and personally vote your shares.

Confidentiality

    All proxies, ballots and tabulations that identify the vote of a particular stockholder are kept confidential, except as necessary to allow the inspectors of election to certify the voting results or to meet certain legal requirements. Representatives of EquiServe Trust Company, N.A. will act as the inspectors of election and will count the votes. They are independent of Allstate and its directors, officers and employees.

    Comments written on proxy cards/voting instruction forms or ballots may be provided to the Secretary of Allstate with the name and address of the stockholder. The comments will be provided without reference to the vote of the stockholder, unless the vote is mentioned in the comment or unless disclosure of the vote is necessary to understand the comment. At Allstate's request, the inspectors of election may provide Allstate with a list of stockholders who have not voted and periodic status reports on the aggregate vote. These status reports may include breakdowns of vote totals by different types of stockholders, as long as Allstate is not able to determine how a particular stockholder voted.

Profit Sharing Participants

    If you hold Allstate common shares through The Savings and Profit Sharing Fund of Allstate Employees, your proxy card/voting instruction form for those shares will instruct the profit sharing trustee how to vote those shares. If you return a proxy card/voting instruction form on a timely basis, the trustee shall vote as instructed for all Allstate common shares allocated to your profit sharing account unless to do so would be inconsistent with the trustee's duties.

    If you do not return your proxy card/voting instruction form on a timely basis for the shares allocated to your profit sharing account, or you submit it with unclear voting instructions, those shares will be considered "unvoted". The trustee will vote all unvoted shares and all unallocated shares held by the profit sharing fund as follows:

•

If the trustee receives instructions (through proxy card/voting instruction forms) on a timely basis for at least 50% of the votable shares in the profit sharing fund, then it will vote all unvoted shares and unallocated shares in the same proportion and in the same manner as the shares for which timely instructions have been received, unless to do so would be inconsistent with the trustee's duties.



•

If the trustee receives instructions for less than 50% of the votable shares, the trustee shall vote all unvoted and unallocated shares in its sole discretion. However, the trustee will not use its discretionary authority to vote on adjournment of the meeting in order to solicit further proxies.

    Profit sharing votes receive the same level of confidentiality as all other votes. You may not vote the shares allocated to your profit sharing account by attending the meeting and voting in person. You must

2

instruct The Northern Trust Company, as trustee for the profit sharing fund, as to how you want your profit sharing fund shares voted.

If You Receive More Than One Proxy Card/Voting Instruction Form

    If you receive more than one proxy card/voting instruction form, your shares are probably registered in more than one account or you may hold shares as a registered stockholder and through The Savings and Profit Sharing Fund of Allstate Employees. You should vote each proxy card/voting instruction form you receive.

Annual Report Delivery

    Some banks, brokers and other record holders may be participating in the practice of "householding" proxy statements and annual reports. This means that you and other holders of Allstate common stock in your household may not receive separate copies of our proxy statement or annual report. We will promptly deliver an additional copy of either document to you if you call or write us at the following address or phone number: Investor Relations, The Allstate Corporation, 3075 Sanders Road, Northbrook, IL 60062-7127, (800) 416-8803.

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Item 1
Election of Directors

    Each nominee was previously elected by the stockholders at Allstate's 2000 Annual Meeting on May 18, 2000, and has served continuously since then. The terms of all directors will expire at this annual meeting in May 2001. No person, other than the directors of Allstate acting solely in that capacity, is responsible for the naming of the nominees. The Board of Directors expects all nominees named in this proxy statement to be available for election. If any nominee is not available, then the proxies may vote for a substitute.

    Information as to each nominee follows. Unless otherwise indicated, each nominee has served for at least five years in the business position currently or most recently held.

Nominees

		F. Duane Ackerman (Age 58) Director since 1999     Chairman, President and Chief Executive Officer since 1997 of BellSouth Corporation, a communications services company. Mr. Ackerman previously served as President and Chief Executive Officer of BellSouth Corporation from 1996 to 1997 and as Chief Operating Officer and Vice Chairman from 1995 to 1996. Mr. Ackerman also serves as a director of Wachovia Bank.
		James G. Andress (Age 62) Director since 1993     Chairman and Chief Executive Officer of Warner Chilcott PLC, a pharmaceutical company, from February 1997 until his retirement in January 2000. Mr. Andress had been President, Chief Executive Officer and a director of Warner Chilcott since 1996. Mr. Andress also served as its President and Chief Executive Officer from November 1996 until 1998. Mr. Andress is also a director of Information Resources, Inc., OptionCare,  Inc., Sepracor, Inc., and Xoma Corporation.
		Warren L. Batts (Age 68) Director since 1993     Chairman and Chief Executive Officer of Tupperware Corporation, a consumer products company, from June 1996 until his retirement in September 1997. He served as Chairman and Chief Executive Officer of Premark International, Inc. from September 1986 to June 1996 and as Chairman of the Board of Premark International, Inc. until September 1997. He is also a director of Cooper Industries, Inc., Sears, Roebuck and Co., and Sprint Corporation.
		Edward A. Brennan (Age 67) Director since 1993     Chairman of the Board, President and Chief Executive Officer of Sears, Roebuck and Co. from January 1986 until his retirement in August 1995. Mr. Brennan is also a director of AMR Corporation, Dean Foods Company, Exelon Corporation, Minnesota Mining and Manufacturing Company, and Morgan Stanley Dean Witter & Co.

4

		James M. Denny (Age 68) Director since 1993     Chairman since January 2001 of Gilead Sciences, Inc., a biopharmaceutical company. Mr. Denny is also an advisor to investors and investment managers including William Blair Capital Partners LLC, a private equity fund, where he had been Managing Director from September 1995 until December 2000. Previously, Mr. Denny was Vice Chairman of Sears, Roebuck and Co. until his retirement in August 1995. He is also a director of ChoicePoint, Inc. and GATX Corporation.
		W. James Farrell (Age 58) Director since 1999     Chairman since May 1996 and Chief Executive Officer since September 1995 of Illinois Tool Works Inc., a manufacturer of engineering and industrial components. Mr. Farrell served as President of Illinois Tool Works from September 1994 to May 1996. He is also a director of the Federal Reserve Bank of Chicago, Sears, Roebuck and Co. and the Quaker Oats Company.
		Ronald T. LeMay (Age 55) Director since 1999     President and Chief Operating Officer since October 1997 of Sprint Corporation, a global communications company. Mr. LeMay was Chairman, President and Chief Executive Officer of Waste Management, Inc., a provider of waste management services, from July 1997 to October 1997. Previously, Mr. LeMay was President and Chief Operating Officer of Sprint from February 1996 to July 1997 and Vice Chairman from April 1995 to February 1996. He was Chief Executive Officer of Sprint Spectrum L.P. from March 1995 to September 1996. Mr. LeMay is also a director of Ceridian Corporation, Imation Corporation and Sprint Corporation.
		Edward M. Liddy (Age 55) Director since 1999     Chairman, President and Chief Executive Officer of Allstate since January 1999. Mr. Liddy served as President and Chief Operating Officer of Allstate from January 1995 until 1999. Before joining Allstate, Mr. Liddy was Senior Vice President and Chief Financial Officer of Sears, Roebuck and Co. He is also a director of Minnesota Mining and Manufacturing Company and The Kroger Co.
		Michael A. Miles (Age 61) Director since 1993     Special Limited Partner since 1995 of Forstmann Little & Co., an investment firm. He is also a director of AMR Corporation, AOL Time Warner Inc., Community Health Systems, Inc., Dell Computer Corporation, Exult, Inc., The Interpublic Group of Companies, Inc., Morgan Stanley Dean Witter & Co. and Sears, Roebuck and Co.
		H. John Riley, Jr. (Age 60) Director since 1998     Chairman, President and Chief Executive Officer since April 1996 of Cooper Industries Inc., a diversified manufacturer of electrical products and tools and hardware. Mr. Riley had served as President and Chief Executive Officer of Cooper since 1995. He is also a director of Baker Hughes Inc.

5

		Joshua I. Smith (Age 59) Director since 1997     Vice Chairman and Chief Development Officer since June 2000 of iGate, Inc., a manufacturer of broadband convergence products for communications companies. Previously, Mr. Smith had been Chairman and Chief Executive Officer of The MAXIMA Corporation, a provider of technology systems support services, from 1978 until 2000. In June 1998, The MAXIMA Corporation filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Reform Act of 1978 in the United States Bankruptcy Court, District of Maryland. Mr. Smith is also a director of Cardio Comm Solutions, Caterpillar, Inc. and Federal Express Corporation.
		Judith A. Sprieser (Age 47) Director since 1999     Chief Executive Officer since September 2000 of Transora, a global eMarketplace for consumer packaged goods. Ms. Sprieser was Executive Vice President of Sara Lee Corporation from 1998 until 2000 and had also served as Chief Financial Officer from 1994 to 1998. Ms. Sprieser also serves as a director of USG Corporation and is a trustee of Northwestern University.
		Mary Alice Taylor (Age 51) Director since 2000     Chairman and Chief Executive Officer of HomeGrocer.com, an internet e-commerce company from September 1999 until her retirement in October 2000. Ms. Taylor was Corporate Executive Vice President of Citigroup, Inc. from January 1997 until September 1999. Previously, Ms. Taylor was Senior Vice President of Federal Express Corporation from June 1980 until December 1996. Ms. Taylor also serves as a director of Autodesk, Inc., Blue Nile, Inc., Dell Computer Corporation, Sabre Inc. and Webvan Group, Inc.

Meetings of the Board and Board Committees

    The Board held six meetings during 2000. Each incumbent director attended at least 75% of the Board meetings and meetings of committees of which he or she was a member. The following table identifies each committee, its members and the number of meetings held during 2000. The Board of Directors, in its business judgment, has determined that all members of the Audit Committee are "independent" as required by the applicable listing standards of the New York Stock Exchange. A summary of each committee's functions and responsibilities follows the table.

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Functions of Board Committees

    Audit Committee Functions:

•

Review Allstate's annual financial statements, annual report on Form 10-K and annual report to stockholders and prepare the Audit Committee Report for the proxy statement



•

Review Allstate's accounting, auditing and internal control principles and practices affecting the financial statements



•

Examine the scope of audits conducted by the independent public accountants and the internal auditors



•

Review reports by the independent public accountants and internal auditors concerning management's compliance with law and Allstate's policies on ethics and business conduct



•

Confer with the General Counsel on the status of potentially material legal matters affecting Allstate's financial statements



•

Periodically review and evaluate the qualifications, independence and performance of the independent public accountants



•

Advise the Board on the appointment of independent public accountants



•

Conduct independent inquiries when deemed necessary by the Committee to discharge its duties



•

Conduct annual review and assessment of Audit Committee charter

    Compensation and Succession Committee Functions:

•

Recommend nominees for certain officer positions



•

Administer Allstate's executive compensation, stock option and benefit plans



•

Advise the Board on the proxy statement and form of proxy for the annual meeting



•

Annually review management organization and succession plans for the corporation and senior officers of each significant operating subsidiary

    Nominating and Governance Committee Functions:

•

Recommend nominees for election to the Board and its committees



•

Recommend nominees for election as Chairman and Chief Executive Officer



•

Determine the criteria for the assessment of the performance of the Board and administer non-employee director compensation



•

Conduct periodic reviews of the performance of the Chairman and Chief Executive Officer



•

Advise the Board on the proxy statement and form of proxy for the annual meeting



•

Advise the Board on the establishment of guidelines on corporate governance



•

Advise the Board on policies and practices on stockholder voting

Compensation Committee Interlocks and Insider Participation

    During 2000, the Compensation and Succession Committee consisted of H. John Riley, Jr., Chairman, F. Duane Ackerman, James G. Andress, Warren L. Batts, Edward A. Brennan, W. James Farrell, Ronald T. LeMay. None is a current or former officer of Allstate or any of its subsidiaries. There were no committee interlocks with other companies in 2000 within the meaning of the Securities and Exchange Commission's proxy rules.

7

Directors' Compensation and Benefits

    The following table lists the compensation and benefits provided in 2000 to directors who are not employees of Allstate or its affiliates ("non-employee directors"):

Non-Employee Directors' Compensation and Benefits

(a)

Under the Equity Incentive Plan for Non-Employee Directors, directors may elect to receive Allstate common stock in lieu of cash compensation. In addition, under Allstate's Deferred Compensation Plan for Directors, directors may elect to defer directors' fees to an account which generates earnings based on:

1. The market value of and dividends on Allstate's common shares ("common share equivalents")

2. The average interest rate payable on 90-day dealer commercial paper

3. Standard & Poor's 500 Composite Stock Price Index (with dividends reinvested)

4. A money market fund

No director has voting or investment powers in common share equivalents, which are payable solely in cash. Subject to certain restrictions, amounts deferred under the plan (together with earnings thereon) may be transferred between accounts and are distributed in a lump sum or over a period not in excess of ten years.

(b)

Granted each December 1st under the Equity Incentive Plan for Non-Employee Directors and subject to restrictions on transfer until the earliest of six months after grant, death or disability or termination of service. Grants are accompanied by a cash payment to offset the increase in the director's federal, state and local tax liabilities (assuming the maximum prevailing individual tax rates) resulting from the grant of shares. Directors who are elected to the board between annual shareholder meetings are granted a pro-rated number of Allstate shares on June 1st following the date of the director's initial election.

(c)

Granted each June 1st at exercise prices equal to 100% of value on the date of grant. Effective June 1, 2001, the option grant will change to 4,000 shares. Directors who are elected to the board between annual shareholder meetings are granted an option for a pro-rated number of shares on the date of their election at an exercise price equal to 100% of value on the date of their election. The options become exercisable in three annual installments, expire ten years after grant, and have a "reload" feature. The reload feature permits payment of the exercise price by tendering Allstate common stock, which in turn gives the option holder the right to purchase the same number of shares tendered, at a price equal to the fair market value on the exercise date. The options permit the option holder to exchange shares owned or have option shares withheld to satisfy all or part of the exercise price. The vested portion of options may be transferred to any immediate family member, to a trust for the benefit of the director or immediate family members, or to a family limited partnership.

8

Security Ownership of Directors and Executive Officers

    The following table sets forth certain information as to shares of Allstate common stock beneficially owned by each director and executive officer named in the Summary Compensation Table, and by all executive officers and directors of Allstate as a group. Shares reported include shares held as nontransferable restricted shares awarded under Allstate's employee benefit plans, subject to forfeiture under certain circumstances, and shares subject to stock options exercisable on or prior to April 1, 2001. The percentage of Allstate shares beneficially owned by any Allstate director or nominee or by all directors and officers of Allstate as a group does not exceed 1%. Unless indicated otherwise in the footnotes below, all shares are directly owned as of January 31, 2001.

(a)

Each of the totals for Messrs. Andress, Batts, Brennan, Denny and Miles includes 9,000 Allstate shares subject to option.

(b)

Includes 500 shares subject to option.

(c)

Does not include 36,894 shares held by Mr. Brennan's spouse. Mr. Brennan disclaims beneficial ownership of these shares.

(d)

Includes 73,912 shares subject to option.

(e)

Includes 69,793 shares subject to option. Does not include 130 shares held by Mr. Cohen's spouse. Mr. Cohen disclaims beneficial ownership of these shares.

(f)

Does not include 18,000 shares held by Northcote LLC, of which Mr. Denny's spouse is a managing member. Also does not include 370 shares held in a trust of which Mr. Denny is co-trustee. Mr. Denny disclaims beneficial ownership of these shares.

(g)

Includes 1,000 shares subject to option.

(h)

Includes 1,500 shares subject to option.

(i)

Includes 939,768 shares subject to option.

(j)

Includes 2,667 shares subject to option.

(k)

Includes 6,750 shares subject to option.

(l)

Includes 834 shares subject to option.

(m)

Includes 239,504 shares subject to option.

(n)

Includes 424,003 shares subject to option.

(o)

Includes 2,930,120 shares subject to option.

9

Security Ownership of Certain Beneficial Owners

(a)

As of December 31, 2000. Held by Northern Trust Corporation together with certain subsidiaries (collectively "Northern"). Of such shares, Northern held 2,974,781 with sole voting power; 42,528,784 with shared voting power; 2,960,520 with sole investment power; and 181,504 with shared investment power. 42,188,039 of such shares were held by The Northern Trust Company as trustee on behalf of participants in Allstate's profit sharing plan. Information is provided for reporting purposes only and should not be construed as an admission of actual beneficial ownership.

(b)

As of December 29, 2000 based on Form 13G reflecting sole investment power over shares, filed by Capital Research and Management Company on February 12, 2001.

Item 2
Ratification of Appointment of Independent Public Accountants

    Item 2 is the ratification of the appointment by the Board of Deloitte & Touche LLP as Allstate's independent public accountants for 2001. The Board's appointment was based on the Audit Committee's recommendation. Although stockholder approval of the Board's appointment of Deloitte & Touche LLP is not required by law, the Board of Directors believes it is advisable to give stockholders an opportunity to ratify its selection. If the appointment is not ratified, the Board of Directors may reconsider its selection.

    Representatives of Deloitte & Touche LLP will be present at the meeting, will be available to respond to questions and may make a statement if they so desire.

    The Board unanimously recommends that stockholders vote for the ratification of the appointment of Deloitte & Touche LLP as independent public accountants for 2001 as proposed.

Item 3
Approval of The Allstate Corporation
2001 Equity Incentive Plan

    We are asking stockholders to approve The Allstate Corporation 2001 Equity Incentive Plan, which the Board approved on March 13, 2001. The Board believes the plan will help attract and retain key employees by providing a means by which such employees can acquire and maintain equity ownership, aligning their interests with those of the stockholders.

    Under the existing equity incentive plan, only 3,199,503 shares remain available for awards as of March 15, 2001. Thus, additional shares are needed in order to continue the Company's equity based compensation for officers and other key employees. No awards will be made under the plan unless it is approved by stockholders.

    The following is a summary of the material features of the plan and is qualified in its entirety by reference to Appendix A, which contains the complete text of the plan.

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Summary of the 2001 Equity Incentive Plan

Administration.  The plan will be administered by the Compensation and Succession Committee or another committee appointed by the Board of Directors. The Committee will have full and final authority under the plan to determine eligibility and types and terms of awards and to interpret and administer the plan.

Shares Available Under the Plan.  A maximum of 37,000,000 shares of common stock would be reserved for issuance under the plan. In addition, any unused shares available for awards under The Allstate Corporation Equity Incentive Plan will be available for awards under this plan. The Committee may use either authorized but unissued shares or treasury shares for awards.

    As of March 15, 2001, the closing price of Allstate common stock as reported on the New York Stock Exchange Composite Tape was $40.07.

Eligibility.  Awards may be made to key employees of Allstate or any of its subsidiaries. In determining which key employees will receive awards, the Committee will consider such factors as it deems relevant in order to promote the purposes of the plan. As of March 15, 2001, there were approximately 1,500 key employees of Allstate and its subsidiaries.

Types of Awards

Stock Options.  The plan provides for the grant of nonqualified options and incentive stock options. Each award will include the option exercise price, its term (which shall not be greater than 10 years) and vesting schedule (which has been a four-year schedule for recent grants under the Company's existing equity plan), and any rights to dividend equivalents and reload options. The Committee will not have the right to amend an outstanding option grant for the sole purpose of reducing its exercise price.

    The option exercise price must be at least the fair market value of Allstate common stock on the date of grant. To exercise an option, the employee must deliver written notice of intent to purchase a specific number of shares subject to the option terms. The exercise price for the shares must be paid in full at the time of exercise. Payment may be made by cash, previously acquired shares of common stock, simultaneous sale through a broker of common stock acquired on exercise, or any combination of the foregoing.

    An option may contain a reload feature. If an employee pays the exercise price by tendering shares of common stock, the employee then receives a reload option for the amount of shares tendered (and, if so provided by the Committee, for shares retained by Allstate to satisfy tax withholding obligations). The reload option will have an exercise price equal to the fair market value of Allstate stock on the date the common stock was tendered to exercise the option and will be subject to new vesting provisions commencing one year from the date of grant. The remaining terms of the reload option shall be the same as the underlying exercised option, including the original expiration dates.

Unrestricted Stock, Restricted Stock, and Restricted Stock Units.  The Committee may also award shares of common stock, which may be subject to restrictions, and restricted stock units. The Committee may establish performance goals, described below, for restricted stock and restricted stock units. Each award shall include the restrictions, period of restriction and performance goals, if applicable.

    Employees holding restricted stock may exercise full voting rights with respect to those shares during the restriction period and, subject to the Committee's right to determine otherwise at grant date, will receive regular cash dividends.

Stock Appreciation Rights.  SARs may be in the form of freestanding SARs or tandem SARs or any combination. Upon exercise of a SAR, an employee will receive payment in an amount equal to the product of the excess of the fair market value on the date of exercise over the base value multiplied by the number of shares of stock with respect to which the SAR is exercised.

Performance Units and Performance Stock.  The Committee may also award performance units and performance stock with performance goals. The extent to which the performance goals are met during the performance periods established by the Committee will determine the number and/or value of performance units/stock that will be paid to employees. Payment of the value of earned performance units/stock after the end of the performance period will be made in cash or stock (or a combination of both) that has an aggregate fair market value equal to the value of the performance units/stock at the end of the performance period. Such stock may be granted subject to any restrictions the Committee determines.

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Other Awards.  The Committee may grant other awards which may include the payment of stock in lieu of cash (including cash payable under other company incentive or bonus programs) and the payment of cash based on attainment of performance goals established by the Committee.

Performance Goals.  Certain awards under the plan may be based on achievement of performance goals. These goals are established by the Committee and shall be based on one or more of the following measures: sales or revenues, earnings per share, stockholder return and/or value, funds from operations, operating income, gross income, net income, combined ratio, underwriting income, cash flow, return on equity, return on capital, return on assets, net earnings, earnings before interest, operating ratios, stock price, customer satisfaction, customer retention, accomplishment of mergers, acquisitions, dispositions or similar extraordinary business transactions, profit returns and margins, financial return ratios and/or market performance. Performance goals may be measured solely on a corporate, subsidiary or business unit basis, or a combination, and may reflect absolute entity performance or a relative comparison of entity performance to the performance of a peer group or other external measure.

Other Limits on Awards.  No more than 9,000,000 shares may be granted as restricted stock, unrestricted stock, restricted stock units or as other awards under Article 10 of the plan, combined. No more than 9,000,000 shares may be granted subject to ISOs. The total number of shares intended to qualify for deduction under Section 162(m) of the Internal Revenue Code with respect to any one type of award that may be granted in any calendar year to any covered employee shall not exceed 1.2 million shares. For purposes of this limit each of: options and SARs; restricted stock and restricted stock units; performance stock and performance units; and other awards are considered separate types of awards. The total cash award under the plan that is intended to qualify for deduction and that may be paid under Article 10 of the plan in any calendar year to any covered employee shall not exceed $1,200,000. The aggregate number of dividend equivalents that are intended to qualify for deduction that a covered employee may receive in any calendar year shall not exceed 4,800,000. A covered employee generally includes the chief executive officer and the next four most highly compensated officers.

Elective Share Withholding.  An employee may elect to have shares withheld in an amount required to satisfy the minimum federal, state and local tax withholding requirements upon the exercise of an option or SAR, the vesting of a restricted stock award or any other taxable event. The shares withheld shall have a fair market value not to exceed the estimated tax liability of the employee with respect to the exercise or vesting.

Loans and Guarantees.  The Committee may allow an employee to defer payment of all or any portion of any amount payable to Allstate with respect to any award (including any taxes) or may cause Allstate to guarantee a loan from a third party to the employee in an amount equal to all or any portion payable to Allstate.

Transferability.  In general, each award shall not be assignable or transferable other than by will or the laws of descent and distribution. Vested portions of non-qualified options may be transferred to certain family members or to a trust, foundation or any other entity meeting certain ownership requirements.

Forfeitability.  Subject to exceptions for death, disability, and retirement, an employee will forfeit all unexercised options three months after termination of employment unless the Committee determines otherwise. Unless otherwise provided by the Committee, all other awards shall terminate and be forfeited on the date of an employee's termination of employment or failure to achieve specific performance goals.

Adjustments for Certain Events.  The Committee will make proportional adjustments to the maximum number of shares of common stock that may be delivered under the plan and to outstanding awards to reflect stock dividends, stock splits, reverse stock splits, share combinations, recapitalizations, mergers, consolidations, acquisitions of property, stock rights offerings, liquidations or similar events of or by Allstate. The Committee may provide in awards for accelerated vesting of stock options or SARs, non-forfeiture of restricted stock and other rights in a change of control, as defined by the Committee.

Amendment of the Plan.  The Board of Directors may amend, modify or terminate the plan at any time and in any respect, without the approval of the stockholders, except to the extent that stockholder approval is required 1) to permit the Company to deduct compensation resulting from awards from its taxable income under the Internal Revenue Code, 2) to retain incentive stock option treatment under the Internal Revenue Code or 3) under the listing requirements of any securities exchange on which Allstate equity securities are listed.

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Termination of the Plan.  The plan shall remain in effect until the shares are exhausted or until such earlier time as the Board of Directors may determine. Any termination shall not affect any award then outstanding under the plan, unless otherwise provided in the plan or required by applicable law.

Federal Income Tax Consequences

    The following is a general summary of the federal income tax consequences related to options to be granted under the plan as of the date of this proxy statement. The federal tax laws may change and the federal, state and local tax consequences for any employee will depend upon his or her individual circumstances. This information may not be applicable to employees of foreign subsidiaries or to employees who are not residents of the United States.

Nonqualified Stock Options.  Generally an employee will not recognize any taxable income and Allstate is not entitled to a tax deduction at the time a nonqualified stock option, or reload option, is granted. Upon the exercise of the nonqualified stock option, (or, generally, upon the exercise of an incentive stock option followed by a disqualifying disposition, described below) the employee recognizes ordinary income equal to the excess of the fair market value of the shares acquired over the option exercise price, if any, on the date of exercise. Allstate is generally entitled to a deduction equal to the compensation taxable to the employee as ordinary income. Any such income may be subject to federal income, Social Security and employment tax withholding.

Incentive Stock Options.  Generally an employee does not recognize taxable income on the grant or exercise of an incentive stock option and no federal income, Social Security or employment tax will be withheld upon such grant or exercise. However, the excess of the fair market value on the date of exercise over the option exercise price will generally be included in the employee's alternative minimum taxable income and may subject the employee to alternative minimum tax.

    Upon the disposition of shares of common stock acquired on exercise of an incentive stock option more than one year after the date of exercise, and more than two years after the date of grant, the employee will recognize long-term capital gain or loss, as the case may be. This gain or loss is measured by the difference between the common stock's sale price and the exercise price. Allstate will not be entitled to a tax deduction on the grant or exercise of an incentive stock option, or on the disposition of common stock acquired upon the exercise of an incentive stock option.

    If an employee disposes of the shares of common stock acquired upon the exercise of an incentive stock option either before the one year period after exercise, or before the two year period after the date of grant, the difference between the exercise price of such shares and the lesser of (i) the fair market value of the shares on the date of exercise, or (ii) the sale price, will constitute compensation taxable to the employee as ordinary income subject to federal income tax, Social Security and employment tax withholding. Allstate is generally allowed a corresponding tax deduction equal to the amount of the compensation taxable to the employee. If the sale price of common stock exceeds the fair market value on the date of exercise, the excess will be taxable to the employee as capital gain. Allstate is not allowed a deduction with respect to any such capital gain recognized by the employee.

Use of Common Stock to Pay Option Exercise Price of Nonqualified Option.  If an employee delivers previously acquired common stock in payment of all or part of the option exercise price of a nonqualified stock option, there will be no recognition of taxable income or loss of any appreciation or depreciation in value of the tendered common stock. The employee's tax basis in the tendered stock carries over to any equal number of the option shares received on a share-for-share fair market value basis. The fair market value of the shares received in excess of the tendered shares constitutes compensation taxable to the employee as ordinary income. Allstate may be entitled to a tax deduction equal to the compensation income recognized by the employee.

Use of Common Stock to Pay Option Exercise Price of Incentive Stock Option.  If an employee delivers previously acquired common stock in payment of all or part of the incentive stock option exercise price (other than stock acquired on exercise and not held for the required holding periods), the employee will not recognize as taxable income or loss any appreciation or depreciation in the value of the tendered stock after its acquisition date. The tax basis in, and capital gain holding period for, the tendered stock carries over to an equal number of option shares received on a share-for-share basis. Shares received in excess of the

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tendered shares have a tax basis equal to the amount paid, if any, in excess of the tendered shares and such shares' holding period will begin on the date of exercise.

    If an employee delivers previously acquired common stock that was acquired upon the exercise of an incentive stock option that was not held for the required holding periods, ordinary income will be recognized by the employee and Allstate will be entitled to a corresponding compensation deduction. The employee's basis in the shares received in exchange for the tendered shares will be increased by the amount of ordinary income recognized.

    It is not possible at this time to determine awards that will be made pursuant to the plan.

    The Board unanimously recommends that stockholders vote for the approval of The Allstate Corporation 2001 Equity Incentive Plan. The text of the entire plan is set forth in Appendix A.

Item 4
Stockholder Proposal on Cumulative Voting

    Mr. William E. Parker and Ms. Terri K. Parker, 600 Belem Court, San Ramon, California, 94583, registered owners of 150 shares of Allstate common stock as of November 15, 2000, intend to propose the following resolution at the Annual Meeting.

    "Resolved: That the stockholders of The Allstate Corporation, assembled at the annual meeting in person and by proxy, hereby request the Board of Directors to take the steps necessary to provide for cumulative voting in the election of directors, which means each stockholder shall be entitled to as many votes as shall equal the number of shares he or she owns multiplied by the number of directors to be elected, and he or she may cast all of such votes for a single candidate, or any two or more of them as he or she may see fit."

    The following statement has been submitted in support of the resolution:

"At the 1999 and 2000 stockholders meetings of The Allstate Corporation, this proposal received more than 182,000,000 votes. This proves that there is strong interest on the part of the stockholders to make sure that they have an influence over corporate affairs and management accountability.

We believe the company's financial performance is directly related to its corporate governance procedures and policies.

In the past we pointed out that negative events, like criminal investigations, the reopening of earthquake claims, the investigations by the Department of Labor and being named as defendants in lawsuits involving car repairs are not good for business.

Cumulative voting increases the possibility of electing independent-minded directors that will enforce managements' accountability to shareholders.

Corporations that have independent-minded directors can have an invigorating effect on the Board of Directors, fostering improved financial performance and greater stockholder wealth.

Management nominees to the board often bow to the chairman's desires on business issues and executive pay without question.

Currently, the company's Board of Directors is composed entirely of management nominees. Cumulative voting would aid in placing a check and balance on management nominees by creating more competitive elections.

The National Bank Act provides for cumulative voting for bank company boards.

A California law provides that all state pension holdings and state college funds, invested in shares must be voted in favor of cumulative voting proposals, showing another example of the recognition of the importance of cumulative voting.

Sears, Roebuck and Company, the company that founded the Allstate Insurance Company in 1931 adopted cumulative voting in 1906.

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The standard argument that the adoption of cumulative voting will lead to the election of dissidents to the Board of Directors who will only represent the special interests is misleading, because the standards of fiduciary duty compel all directors to act in the best interest of all shareholders. Any director who fails to respect the duties of loyalty and/or care exposes himself or herself to significant liability.

We also do not believe that honest differences of opinion are necessarily bad for a corporation. Dissent stimulates debate, which leads to thoughtful action and deters complacency on the Board of Directors.

    Please mark your proxy for this resolution, as an abstention has the effect of votes cast "against" this resolution."

    The Board unanimously recommends that stockholders vote against this proposal for the following reasons:

    The Board believes that each director should represent all stockholders. Allstate's current method of electing directors, by a plurality of the votes cast, is the best way to elect an independent board that represents all stockholders.

    Cumulative voting is inconsistent with the principle that each director should represent all stockholders. It permits the election of a director by one stockholder or by a relatively small group of stockholders. Consequently, cumulative voting can result in the election of a director who feels accountable to a particular stockholder constituency, not to stockholders as a whole. A director who represents a particular stockholder constituency may feel obligated to pursue the financial, political or social agenda of that group of stockholders to the detriment of the overall interests and goals of all stockholders.

    The proponents erroneously suggest that Allstate's Board is not independent. With the typical exception of the chairman of the board and chief executive officer, none of the nominees for election to the Board are employees or former employees of Allstate and none have any significant financial or personal ties to Allstate or to its management. Moreover, all of the nominees have been evaluated and recommended for election by the Nominating and Governance Committee, which is comprised entirely of independent, non-employee directors. The Committee is charged with selecting members who not only are highly qualified but also reflect a diversity of experience and viewpoints.

    Each incumbent director seeking re-election stands on his or her own credentials and record of service to Allstate and its stockholders. It is the stockholders, not management, who ultimately elect the Board of Directors by casting their votes for the candidates. The Board believes that this demonstrates that its current method of selection and election ensures the continued independence of the Board and therefore continues to serve the interests of all stockholders equally.

    The Board agrees that financial performance is driven in part by strong corporate governance standards. The Board abides by established internal governance guidelines. These guidelines are annually reviewed by the Board to ensure that the guidelines remain current and consistent with corporate governance best practices.

    The Board also agrees with the proponents that legal action against a company is not "good for business". Unfortunately, large corporations have become a favorite target in today's litigious society. Allstate is committed to conducting its business in full compliance with the law. In that regard, we are heartened by the fact that in February 2001 Allstate was advised by the Los Angeles United States Attorney's office that its investigation into Allstate's claims handling arising from the 1994 Northridge earthquake in California has ended. The office has informed Allstate that it is terminating its investigation with no charges or action being taken against the company. In addition, Allstate continues to vigorously defend itself against the actions related to the use of non-original equipment manufacturer replacement parts.

    For the reasons stated above, the Board recommends a vote against this proposal.

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Item 5
Stockholder Proposal Relating to CERES Principles

    The American Friends Service Committee, Catholic Healthcare West and Trillium Asset Management representing Ms. Elizabeth Welsh, beneficial owners of 6,200, 285,406, and 370 shares of Allstate common stock as of November 21, 2000, November 10, 2000 and November 20, 2000, respectively, intend to propose the following resolution at the Annual Meeting.

"ENDORSEMENT OF THE CERES PRINCIPLES
FOR PUBLIC ENVIRONMENTAL ACCOUNTABILITY

    WHEREAS: Leaders of industry in the United States now acknowledge their obligation to pursue superior environmental performance and to disclose information about the performance to their investors and other stakeholders.

    The integrity, utility, and comparability of environmental disclosure depend on using a common format, credible metrics, and a set of generally accepted standards. This will enable investors to assess environmental progress within and across industries.

    The Coalition for Environmentally Responsible Economies (CERES)—a ten-year partnership between large investors, environmental groups, and corporations—has established what we believe is the most thorough and well-respected environmental disclosure form in the United States. CERES has also taken the lead internationally, convening major organizations together with the United Nations Environment Programme in the Global Reporting Initiative, which has produced guidelines for standardizing environmental disclosure worldwide.

    Companies that endorse the CERES Principles engage with stakeholders in transparent environmental management and agree to a single set of consistent standard for environmental reporting. That standard is set by the endorsing companies together with CERES.

    The CERES Principles and CERES Report have been adopted by leading firms in various industries: Arizona Public Service, Bank America, BankBoston, Baxter International, Bethlehem Steel, Coca-Cola, General Motors, Interface, ITT Industries, Northeast Utilities, Pennsylvania Power and Light, and Polaroid, and Sun company.

    We believe endorsing the CERES Principles commits a company to the prudent oversight of its financial and physical resources through: 1) protection of the biosphere; 2) sustainable use of natural resources; 3) waste reduction; 4) energy conservation; 5) risk reduction; 6) safe products/services; 7) environmental restoration; 8) informing the public; 9) management commitment; 10) audits and reports. (The full text of the CERES Principles and accompanying CERES Report form are obtainable from CERES, 11 Arlington Street, Boston, Massachusetts 02116, (617) 247-0700, and at its web site at ceres.org.)

    RESOLVED: Shareholders request that the company endorse the CERES Principles as a reasonable and beneficial component of their corporate commitment to be publicly accountable for environmental performance.

    SUPPORTING STATEMENT: Recent studies show that the integration of environmental commitment into business operations provides competitive advantage and improves long-term financial performance for companies. In addition, the depth of a firm's environmental commitment and the quality with which it manages its environmental performance are indicators of prudent foresight exercised by management.

    Given investors' needs for credible information about a firm's environmental performance and given the number of companies that have already endorsed the CERES Principles and adopted its report format, it is a reasonable, widely accepted step for a company to endorse these Principles if it wishes to demonstrate its seriousness about superior environmental performance.

    This resolution received the support of 9.4% of the shares represented at the meeting and entitled to be voted on it last year. Your vote FOR this resolution serves the best interests of our Company and its shareholders."

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    The Board unanimously recommends that stockholders vote against this proposal for the following reasons:

    Allstate has long been committed to conducting our business in an environmentally sound manner and we continue to agree, in principle, with the objectives espoused by the CERES organization. However, our environmental efforts and commitments must remain closely aligned with those of our stockholders, our policyholders and their communities. Because the CERES Principles do not effectively advance those interests, the Board again recommends that you vote against the formal endorsement of the CERES Principles.

    Allstate's on-going environmental efforts reflect our dedication to operating in a human-healthy and environmentally sound manner. A fresh example of that dedication is our recently announced decision to become a service provider to the Clean Environment Trust, a non-profit organization created to facilitate the cleanup of hazardous waste sites. The Clean Environment Trust aids the environmental liability settlement process by providing a mechanism to fund these efforts.

    Allstate engages in a variety of recycling programs that include paper, plastics, cans, cutting blades, carpeting, fluorescent lamps, fuel oil, solvents, automobile tires, coolants and scrap metals. We offer an energy-friendly vanpool program for our home office employees. Our Tech-Cor research and training facility works with auto manufacturers to develop innovative ways to make cars more damage resistant, safer and cost-efficient.

    We especially pride ourselves on our history of commitment to various community service programs. Our commitment is demonstrated by our participation in external partnerships, by financial support and by our encouragement of employee volunteerism through our Helping Hands organization. Helping Hands volunteers are active in a variety of projects across the country, from beach clean-ups to soup kitchens to hosting events for senior citizens at our home office. A few of the community-focused organizations that Allstate supports include America's Promise, the Boys and Girls Clubs of America, the NeighborWorks Network, the All-America Cities Awards, the National Council of LaRaza and The American Red Cross. We also manage our investment portfolio with consideration for environmental and community value criteria.

    Allstate's commitment to human safety and risk aversion lies at the very core of our business. We continuously strive to promote awareness of issues aimed at accident- and injury-prevention and safety. In this regard, we published and distributed over fifteen million safety-related communications last year. We also post safety-related tips on our website dealing with the hazards of fires, storms and catastrophes.

    We have considered the CERES Principles carefully again this year and, while we agree with their underlying sentiments, the Board does not recommend their formal endorsement. Allstate's efforts are already consistent with the tenets espoused by the CERES Principles. As an insurer operating across the United States, we must comply with all relevant state and federal environmental laws. Compliance with the CERES Principles and payment of the organization's dues would be both an administrative burden and an unnecessary financial drain, and would not be in the best interests of Allstate or its stockholders.

    For the reasons stated above, the Board recommends a vote against this proposal.

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Executive Compensation

    The following Summary Compensation Table sets forth information on compensation earned in 1998, 1999 and 2000 by Mr. Liddy (Allstate's Chief Executive Officer since January 1, 1999) and by each of Allstate's four most highly compensated executive officers (with Mr. Liddy, the "named executives").

Summary Compensation Table