Allstate 2008 Annual Report Download - page 165

Management’s Discussion and Analysis
of Financial Condition and Results of Operations–(Continued)
ALLSTATE FINANCIAL 2008 HIGHLIGHTS
●Net loss was $1.72 billion in 2008 compared to net income of $465 million in 2007.
●Net realized capital losses totaled $3.13 billion in 2008 compared to $193 million in 2007.
●During 2008, we recorded $397 million in accelerated DAC and deferred sales inducement costs (‘‘DSI’’)
amortization related to deferred annuities and interest-sensitive life insurance due to changes in
assumptions (which resulted in changes to total EGP). Additional amortization of DAC totaling $336 million
was recorded in connection with a premium deficiency assessment for traditional life insurance and
immediate annuities with life contingencies primarily due to revised annuity mortality assumptions.
●Contractholder fund deposits totaled $10.40 billion for 2008 compared to $8.99 billion for 2007.
●Investments as of December 31, 2008 decreased 17.2% to $61.50 billion from $74.26 billion as of
December 31, 2007 and net investment income decreased 11.3% to $3.81 billion in 2008 from $4.30 billion
in 2007.
●Continued focus on improving returns and reducing our concentration in spread based products, primarily
fixed annuities and institutional markets products.
●Launched an initiative that will result in lower operating expenses in 2009 and 2010, and targeting annual
savings of $90 million beginning in 2011.
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MD&A