A.M. Best Co. has affirmed the financial strength rating (FSR) of A- (Excellent) and issuer credit ratings (ICR) of “a-” of the members of the Allstate New Jersey Insurance Group (collectively referred to as Allstate New Jersey) (headquartered in Bridgewater, NJ). The outlook for all ratings is stable. Allstate New Jersey’s ultimate parent is The Allstate Corporation (Allstate) (Northbrook, IL) [NYSE: ALL]. (See below for a detailed listing of the companies.) The rating affirmations are based on Allstate New Jersey’s adequate risk-adjusted capitalization and management’s local market knowledge. Allstate New Jersey continues to undertake various actions to enhance its overall operating results as the dedicated New Jersey property/casualty carrier for Allstate. In addition, Allstate New Jersey’s operating performance has generally benefited from its ability to quickly react to changing market conditions. Furthermore, the group’s private passenger automobile margins have improved due to recent rate activity, new business acceptance criteria and renewal book actions. To better match price with risk, Allstate New Jersey’s recent actions to improve its homeowners’ business have included rate increases, targeted customer/property inspections and a reduction in mono-line homeowners’ exposure. Additionally, the ratings acknowledge the operational and financial benefits Allstate New Jersey receives as an affiliate of Allstate Insurance Company, which is a market leader in the U.S. insurance industry. Allstate New Jersey’s positive rating factors are somewhat offset by its geographic concentration within one state, which exposes its capitalization and earnings to weather-related losses, competitive pressures and regulatory mandates. This exposure has been evident in recent years as its homeowners and auto physical damage lines of business were negatively impacted by net catastrophe losses totaling approximately $260 million in 2012, primarily from Superstorm Sandy, and $95 million in 2011, with an overall combined ratio impact of approximately 22 points and 12 points, respectively. However, to reduce surplus volatility, Allstate New Jersey has not paid dividends in recent years and maintains a conservative investment portfolio.