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Exhibit 10.5

Annual Incentive Plans
Performance Goals and Target Awards for 2006

        The registrant maintains two shareholder-approved plans under which
executive officers have the opportunity to receive an annual cash award based on
the achievement of performance goals over a one-year period. The Annual Covered
Employee Incentive Compensation Plan (Covered Employee Plan) governs awards to
those executive officers who are considered "covered employees" as defined in
Section 162(m)(3) of the Internal Revenue Code. Annual incentive awards to all
other executive officers are governed by and made under the Annual Executive
Incentive Compensation Plan (Executive Plan). The Compensation and Succession
Committee of the Board of Directors establishes performance goals for each
fiscal year and sets threshold, target and maximum award opportunities. The
Committee has the authority to adjust the amount of awards, but has no authority
to increase the amount of an award otherwise payable under the Covered Employee
Plan. Payments are made after the Committee has certified in writing the degree
of attainment of the performance goals.

        On February 21, 2006, the Committee approved performance goals and
target awards under the plans for 2006. The same performance goals and target
awards apply to both the Covered Employee Plan and Executive Plan. For the chief
executive officer, chief operating officer, chief financial officer and other
executive officers in corporate functions, there are two equally-weighted goals.
One is based on an adjusted operating income per diluted share measure as
approved by the Committee. The other goal is based on combined business unit
results.

        For Allstate Protection executive officers, their award opportunity is
based on five performance goals, generally weighted as follows: 50% based on a
matrix that measures the results of premium growth, policy growth (excluding
property insurance in selected markets) and combined ratio; 15% based on a
measure of sales of Allstate Financial products by Allstate exclusive agencies;
10% based on expense ratio reduction; 15% based on a measure of customer loyalty
that is a relative ranking compared to a peer group of companies; and 10% based
on the corporate adjusted operating income per diluted share measure. Property
insurance policy growth for selected markets is excluded from the matrix that
measures results of premium growth, policy growth and combined ratio because
management is evaluating the implications of reducing the Registrant's exposure
to catastrophe losses.

        For the Allstate Financial executive officer, there are four performance
goals, weighted as follows: 30% based on adjusted Allstate Financial operating
income; 25% based on expense management; 35% based on a matrix that measures the
combination of sales and returns; and 10% based on the corporate adjusted
operating income per diluted share measure.

        For the executive officer in the Investments business unit, there are
six performance goals, weighted as follows: 22.5% based on property/casualty
portfolio one-year return;

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22.5% based on property/casualty portfolio three-year return; 17.5% on Allstate
Financial spread volume goal; 17.5% on Allstate Financial spread higher value
added total; 10% on Allstate Financial portfolio loss reduction; and 10% based
on the corporate adjusted operating income per diluted share measure.

        Threshold, target and maximum levels of performance are established for
each performance goal. If the maximum level of performance is achieved, the
award would be three times the executive officer's target award, with target
awards generally ranging from 60% to 120% of annual salary for the fiscal year.

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