Allstate 2012 Annual Report Download - page 160

Gross unrealized gains and losses as of December 31, 2011 on equity securities by sector are provided in the table
below.
Gross unrealized
($ in millions) Amortized Fair
cost Gains Losses value
Financial services $ 295 $ 37 $ (39) $ 293
Emerging market equity funds 458 — (35) 423
Index-based funds 419 25 (24) 420
Consumer goods (cyclical and non-cyclical) 715 101 (21) 795
Emerging market fixed income funds 610 — (18) 592
Technology 345 49 (12) 382
Basic industry 182 20 (12) 190
Banking 214 19 (11) 222
Energy 272 44 (10) 306
Capital goods 234 22 (9) 247
Real estate 145 8 (7) 146
Communications 165 22 (7) 180
Utilities 92 12 (2) 102
Transportation 57 10 (2) 65
Total equity securities $ 4,203 $ 369 $ (209) $ 4,363
Within the equity portfolio, the losses were primarily concentrated in financial services, emerging market equity
funds and index-based funds. The unrealized losses were company and sector specific. As of December 31, 2011, we
have the intent and ability to hold our equity securities with unrealized losses until recovery.
As of December 31, 2011, the total fair value of our investments in the European Union (‘‘EU’’) is $4.03 billion, with
net unrealized capital gains of $79 million, comprised of $224 million of gross unrealized gains and $145 million of gross
unrealized losses. The following table summarizes our total direct exposure related to Greece, Ireland, Italy, Portugal and
Spain (collectively ‘‘GIIPS’’) and the EU.
Banking Sovereign Other corporate Total($ in millions)
Gross Gross Gross Gross
Fair unrealized Fair unrealized Fair unrealized Fair unrealized
value losses value losses value losses value losses
GIIPS
Fixed income securities $ 23 $ (11) $ 2 $ — $ 496 $ (37) $ 521 $ (48)
Equity securities — — — — 6 — 6 —
Total 23 (11) 2 — 502 (37) 527 (48)
EU non-GIIPS
Fixed income securities 373 (49) 70 (1) 2,785 (34) 3,228 (84)
Equity securities 7 (2) — — 270 (11) 277 (13)
Total 380 (51) 70 (1) 3,055 (45) 3,505 (97)
Total EU $ 403 $ (62) $ 72 $ (1) $ 3,557 $ (82) $ 4,032 $ (145)
We have a comprehensive portfolio monitoring process to identify and evaluate each fixed income and equity
security that may be other-than-temporarily impaired. The process includes a quarterly review of all securities to
identify instances where the fair value of a security compared to its amortized cost (for fixed income securities) or cost
(for equity securities) is below established thresholds. The process also includes the monitoring of other impairment
indicators such as ratings, ratings downgrades and payment defaults. The securities identified, in addition to other
securities for which we may have a concern, are evaluated based on facts and circumstances for inclusion on our
watch-list. All investments in an unrealized loss position as of December 31, 2011 were included in our portfolio
monitoring process for determining whether declines in value were other than temporary.
The extent and duration of a decline in fair value for fixed income securities have become less indicative of actual
credit deterioration with respect to an issue or issuer. While we continue to use declines in fair value and the length of
time a security is in an unrealized loss position as indicators of potential credit deterioration, our determination of
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