Allstate 2014 Annual Report Download - page 109

The failure in cyber or other information security systems, as well as the occurrence of events unanticipated in our
disaster recovery systems and management continuity planning could result in a loss or disclosure of confidential
information, damage to our reputation, additional costs and impairment of our ability to conduct business
effectively
We depend heavily upon computer systems and mathematical algorithms and data to perform necessary business
functions. Despite our implementation of a variety of security measures, our computer systems could be subject to
cyber-attacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. Like other
global companies, we have experienced threats to our data and systems, including malware and computer virus attacks,
unauthorized access, system failures and disruptions. Events such as these could jeopardize the confidential, proprietary
and other information (including personal information of our customers, claimants or employees) processed and stored
in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in
our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory
penalties and/or customer dissatisfaction or loss. These risks may increase in the future as we continue to expand our
internet and mobile strategies, develop additional remote connectivity solutions to serve our customers, and build and
maintain an integrated digital enterprise.
The occurrence of a disaster, such as a natural catastrophe, pandemic, industrial accident, blackout, terrorist attack,
war, cyber-attack, computer virus, insider threat, unanticipated problems with our disaster recovery systems, or a
support failure from external providers, could have an adverse effect on our ability to conduct business and on our
results of operations and financial condition, particularly if those events affect our computer-based data processing,
transmission, storage, and retrieval systems or destroy data. If a significant number of our managers were unavailable in
the event of a disaster, our ability to effectively conduct our business could be severely compromised.
Third parties to whom we outsource certain of our functions are also subject to the risks outlined above. The
Company also has business process and information technology operations in Northern Ireland and India and is subject
to operating, regulatory and political risks in those countries. Any of these may result in our incurring substantial costs
and other negative consequences, including a material adverse effect on our business, financial condition, results of
operations and liquidity.
A large scale pandemic, the continued threat of terrorism or military actions may have an adverse effect on the level
of claim losses we incur, the value of our investment portfolio, our competitive position, marketability of product
offerings, liquidity and operating results
A large scale pandemic, the continued threat of terrorism, within the United States and abroad, or military and other
actions, and heightened security measures in response to these types of threats, may cause significant volatility and
losses in our investment portfolio from declines in the equity markets and from interest rate changes in the United
States, Europe and elsewhere, and result in loss of life, property damage, disruptions to commerce and reduced
economic activity. Some of the assets in our investment portfolio may be adversely affected by declines in the equity
markets and reduced economic activity caused by a large scale pandemic or the continued threat of terrorism.
Additionally, a large scale pandemic or terrorist act could have a material effect on the sales, profitability,
competitiveness, marketability of product offerings, liquidity, and operating results.
We may be required to recognize impairments in the value of our goodwill, which may adversely affect our
operating results and financial condition
Goodwill represents the excess of amounts paid for acquiring businesses over the fair value of the net assets
acquired. Goodwill is evaluated for impairment annually, or more frequently if conditions warrant, by comparing the
carrying value (attributed equity) of a reporting unit to its estimated fair value. Market declines or other events
impacting the fair value of a reporting unit could result in a goodwill impairment, resulting in a charge to income. Such a
charge could have an adverse effect on our results of operations or financial condition.
Changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting
bodies may adversely affect our results of operations and financial condition
Our financial statements are subject to the application of generally accepted accounting principles, which are
periodically revised, interpreted and/or expanded. Accordingly, we are required to adopt new guidance or
interpretations, or could be subject to existing guidance as we enter into new transactions, which may have a material
effect on our results of operations and financial condition that is either unexpected or has a greater impact than
expected. For a description of changes in accounting standards that are currently pending and, if known, our estimates
of their expected impact, see Note 2 of the consolidated financial statements.
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