Exhibit 10.27

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    Copy: Joan Crocket
          Bob Pike
 
 
Edward M. Liddy
Chairman, President & Chief
Executive Officer

July 14, 2002

Mr. Eric A. Simonson

Ric:

We've enjoyed our various conversations over the last few weeks and appreciate
you accommodating a hectic schedule. We think the Allstate opportunity presents
you the perfect capstone to a terrific career and the chance for you to achieve
your long-standing ambition to become a chief investment officer. The attraction
of Allstate is that it is not just "any company". It is a powerful consumer
franchise with enormous upside potential, which you can help us achieve.

We are excited about the prospect of you joining the Allstate team. The purpose
of this letter is to officially extend to you an offer to join Allstate as
Senior Vice President & Chief Investment Officer and President of Allstate
Investments LLC. While we do not follow the practice of providing employment
contracts, we thought it important that we put our offer in writing to provide
as much clarity as possible.

As Chief Investment Officer and President of Allstate Investments LLC, you will
be responsible for guiding all investment activities of the company subject to
conformance with appropriate governance procedures. Equally important, however,
this position is a critical part of our Senior Management Team (SMT) and a
member of our Executive Committee and, as such, we look forward to your
participation and judgment in a broad array of business issues.

We are pleased to offer you a comprehensive compensation and benefits package,
the most important elements of which are outlined below. I think you will
conclude that our offer is generous and comprehensive and addresses all major
benefit issues.

Our offer includes:

1.An initial base salary at an annual rate of $450,000. Subsequent increases in
base salary, generally awarded on an annual basis, will be dependent on your
performance and approval of the Compensation Committee of the Board.

Allstate Insurance Company
2775 Sanders Road, F9        Northbrook, IL    60062-6127    T 847/402-6702

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2.An annual incentive opportunity targeted at 70% of base salary, with a range
of 0% to 175% of base depending upon investment and company performance compared
to appropriate indices or to plan. For the 2002 performance year we will
pro-rate your annual incentive based upon your hire date and guarantee a minimum
payment of no less than a pro-rated target.

3.A long-term compensation opportunity targeted at 310% of annual base salary.
The long-term compensation plan includes both a cash and stock option component.

a.The cash portion is targeted at 50% of annual base salary, with a range of 0%
to 125% of base depending on company performance. Payments are based on the
company's return on average equity versus peers (S&P Property Casualty Index)
over a three-year period. You will be eligible, on a pro-rata basis, for two
long-term cash performance cycles. The first one commenced in 2001 (the 2001-03
cycle) with payment targeted for March 2004. The second cycle commences in 2002
with a payment targeted for March 2005.

b.Stock options, the second component of our long-term compensation plan, are
targeted at 260% of your annual base salary. Using a Black-Scholes valuation
formula, options are generally awarded annually at the market price on the date
of grant. The options have a ten-year duration and vest ratably over a four-year
period commencing one year from the date of grant.

4.Effective with your date of hire, you will be awarded a one-time grant of
125,000 stock options. These options have a ten-year life and vest 50% on the
third anniversary of grant and 50% on the fifth anniversary. Exercise price will
be the market price on the date of grant. At the same time, you will be awarded
a one time grant of 20,000 shares of restricted stock on which you will receive
regular quarterly dividends and which will unrestrict on the fifth anniversary
of your hire date.

5.As we discussed, we strongly believe you need to relocate to Illinois to
effectively discharge the responsibilities of this job and to fully integrate
into the company. We are, however, very sensitive to your family situation and
are prepared to wait

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until August 2003 for you to complete your relocation. We will provide
relocation from your current residence to Illinois. It will include
reimbursement of expenses related to the sale of your home and move, a moving
allowance of 12% of base salary and, if needed, home purchase and relocation
service. We will provide an additional amount of $100,000 (eligible for tax
gross up) which can be used to cover the costs of temporary living until your
family relocates—housing, trips home, etc.

6.During the course of your employment, you will be entitled to participate in
all the benefit plans normally offered to Allstate vice presidents. These
include medical, life insurance, profit sharing (401k), pension, car allowance,
personal tax preparation, and participation in our "corporate" country club
membership and executive physicals. For an overview of benefits you can visit
our careers website at www.allstate.com/careers. Allstate also provides its
officers with a competitive and comprehensive Change of Control agreement.

7.As of 2001, Allstate transitioned to a Paid Time Off (PTO) Bank. You will be
eligible for up to 30 days on an annual basis. The PTO bank can be used for
vacation, personal days, family illness and illness days not covered by the
Short Term Disability (STD) Plan. In addition to PTO days, you will receive
company holidays and miscellaneous time off (funeral, jury duty, emergency time,
etc).

Ric, we look forward to you joining us. We know you will make an important
contribution to Allstate and enjoy a challenging and rewarding career in the
process. We want you to be a part of our success—and share in the rewards.

I'm delighted to extend this offer to you. We look forward to your July 29th
start date.

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