Edward M. Liddy will step down at year's end as chief executive officer of Allstate Corp., to be succeeded by Thomas J. Wilson, who is currently the company's president and chief operating officer.

Mr. Liddy--who has led the fight to establish a national catastrophe fund to back up state disaster facilities via ProtectingAmerica.org--will remain as chairman of the Northbrook, Ill.-based carrier until he retires in the spring of 2008, the company added. He has been chairman and CEO since January 1999.

Mr. Wilson, 48, who joined the company in 1995, will retain the role and title of president. The role of chief operating officer will not be filled, Allstate said.

Mr. Wilson was appointed president of Allstate Financial in 1999 and president of Allstate Protection, the company's largest business unit, in 2002. He assumed his current role of president and COO in May 2005.

Mr. Liddy, who will be 62 at the time of his retirement, served as president and chief operating officer of Allstate from 1994 to 1998, before assuming his current posts in January 1999. Allstate did not indicate who will fill the role of chairman at the time of Mr. Liddy's departure.

Prior to Allstate's announcement, St. Louis-based Stifel Nicolaus & Company upgraded the stock to a buy and raised earnings estimates for the company.

Meyer Shields and Michael Phillips, analysts for Stifel Nicolaus, said, "We think that Allstate is a much smarter company than many investors give it credit for," adding that its low multiples "reflect too much hurricane fear, and not enough recognition of its very impressive capabilities."

In an interview with National Underwriter, Mr. Shields said he was not surprised Mr. Liddy was stepping down at this time. "He has worked quite hard for a long, long time," he said.

Mr. Shields lauded Mr. Liddy, saying he has "done a phenomenal job of taking Allstate from a low-growth, not terribly sophisticated company from the perspective of pricing, and really turned it around, making it one of the most sophisticated in terms of pricing personal lines."

Mr. Shields professed confidence in Mr. Wilson, saying, "I am not really surprised at the change at this time. Mr. Wilson was being groomed for this post..."

Mr. Shields said Mr. Liddy's work in creating a responsive, cooperative captive agency force was especially important. "Particularly now, as competition heats up, there are advantages to having a captive agency force, because if a competitor cuts rates, you won't have to confront a loss of business immediately."

"A captive agency force gives you some protection from rapid competition loss from [soft market] prices," said Mr. Shields. "Historically, there have been problems with Allstate's captive agency force, and Mr. Liddy has resolved those problems."

Special Reports /

Allstate's CEO To Step Down, But Will Remain As Chairman

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