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."