Spreadsheet: 07296c68-386c-439e-ae6d-c17a93d8cce3
Sheet: 10

THE ALLSTATE CORPORATION
ANALYSIS OF DEFERRED POLICY ACQUISITION COSTS
($ in millions)
 |  |  | Change in Deferred Policy Acquisition Costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Reconciliation of Deferred Policy
 |  |  | For the twelve months ended December 31, 2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Acquisition Costs as of December 31, 2012
 |  |  |  |  |  |  |  |  |  |  |  |  | Amortization
 |  |  |  |  |  |  |  |  |  |  |  |  | relating to realized
 |  |  |  |  |  |  |  |  |  |  |  |  | capital gains and |  |  | Amortization |  |  |  |  |  |  |  |  | DAC before |  |  |  |  |  | DAC after
 |  |  |  |  |  |  |  |  |  |  |  |  | losses and |  |  | (acceleration) |  |  | Effect of |  |  |  |  |  | impact of |  |  | Impact of |  |  | impact of
 |  |  |  | Beginning |  |  | Acquisition |  |  | Amortization |  |  | valuation changes on |  |  | deceleration |  |  | unrealized |  |  | Ending |  |  | unrealized |  |  | unrealized |  |  | unrealized
 |  |  |  | balance |  |  | costs |  |  | before |  |  | embedded derivatives |  |  | for changes in |  |  | capital gains |  |  | balance |  |  | capital gains |  |  | capital gains |  |  | capital gains
 |  |  |  | Dec. 31, 2011 |  |  | deferred |  |  | adjustments (1) (2) |  |  | that are not hedged (2) |  |  | assumptions (2) |  |  | and losses |  |  | Dec. 31, 2012 |  |  | and losses |  |  | and losses |  |  | and losses
Property-Liability |  |  | $ | 1348 |  | $ | 3531 |  | $ | -3483 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 1396 |  | $ | 1396 |  | $ | 0 |  | $ | 1396
Allstate Financial:
 | Traditional life and
 |  | accident and health |  | 616 |  |  | 154 |  |  | -99 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 671 |  |  | 671 |  |  | 0 |  |  | 671
 | Interest-sensitive life |  |  | 1698 |  |  | 192 |  |  | -186 |  |  | -18 |  |  | -30 |  |  | -127 |  |  | 1529 |  |  | 1875 |  |  | -346 |  |  | 1529
 | Fixed annuity |  |  | 209 |  |  | 25 |  |  | -25 |  |  | -39 |  |  | -4 |  |  | -141 |  |  | 25 |  |  | 59 |  |  | -34 |  |  | 25
 |  | Subtotal |  | 2523 |  |  | 371 |  |  | -310 |  |  | -57 |  |  | -34 |  |  | -268 |  |  | 2225 |  |  | 2605 |  |  | -380 |  |  | 2225
Consolidated |  |  | $ | 3871 |  | $ | 3902 |  | $ | -3793 |  | $ | -57 |  | $ | -34 |  | $ | -268 |  | $ | 3621 |  | $ | 4001 |  | $ | -380 |  | $ | 3621
 |  |  | Change in Deferred Policy Acquisition Costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Reconciliation of Deferred Policy
 |  |  | For the twelve months ended December 31, 2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Acquisition Costs as of December 31, 2011
 |  |  |  |  |  |  |  |  |  |  |  |  | Amortization
 |  |  |  |  |  |  |  |  |  |  |  |  | relating to realized
 |  |  |  |  |  |  |  |  |  |  |  |  | capital gains and |  |  | Amortization |  |  |  |  |  |  |  |  | DAC before |  |  |  |  |  | DAC after
 |  |  |  |  |  |  |  |  |  |  |  |  | losses and |  |  | (acceleration) |  |  | Effect of |  |  |  |  |  | impact of |  |  | Impact of |  |  | impact of
 |  |  |  | Beginning |  |  | Acquisition |  |  | Amortization |  |  | valuation changes on |  |  | deceleration |  |  | unrealized |  |  | Ending |  |  | unrealized |  |  | unrealized |  |  | unrealized
 |  |  |  | balance |  |  | costs |  |  | before |  |  | embedded derivatives |  |  | for changes in |  |  | capital gains |  |  | balance |  |  | capital gains |  |  | capital gains |  |  | capital gains
 |  |  |  | Dec. 31, 2010 |  |  | deferred |  |  | adjustments (1) (2) |  |  | that are not hedged (2) |  |  | assumptions (2) |  |  | and losses |  |  | Dec. 31, 2011 |  |  | and losses |  |  | and losses |  |  | and losses
Property-Liability |  |  | $ | 1321 |  | $ | 3504 |  | $ | -3477 |  | $ | 0 |  | $ | 0 |  | $ | 0 |  | $ | 1348 |  | $ | 1348 |  | $ | 0 |  | $ | 1348
Allstate Financial:
 | Traditional life and
 |  | accident and health |  | 573 |  |  | 133 |  |  | -90 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 616 |  |  | 616 |  |  | 0 |  |  | 616
 | Interest-sensitive life |  |  | 1917 |  |  | 178 |  |  | -186 |  |  | -21 |  |  | -12 |  |  | -178 |  |  | 1698 |  |  | 1917 |  |  | -219 |  |  | 1698
 | Fixed annuity |  |  | 369 |  |  | 22 |  |  | -55 |  |  | -135 |  |  | 5 |  |  | 3 |  |  | 209 |  |  | 102 |  |  | 107 |  |  | 209
 |  | Subtotal |  | 2859 |  |  | 333 |  |  | -331 |  |  | -156 |  |  | -7 |  |  | -175 |  |  | 2523 |  |  | 2635 |  |  | -112 |  |  | 2523
Consolidated |  |  | $ | 4180 |  | $ | 3837 |  | $ | -3808 |  | $ | -156 |  | $ | -7 |  | $ | -175 |  | $ | 3871 |  | $ | 3983 |  | $ | -112 |  | $ | 3871
(1) | Amortization before adjustments reflects total DAC amortization before amortization/accretion related to realized capital gains and losses and valuation changes on embedded derivatives that are not hedged and amortization acceleration/deceleration for changes in assumptions.
(2) | Included as a component of amortization of DAC on the Consolidated Statements of Operations.