What started as a way for Allstate Insurance Co. customers to make insurance premium payments directly from their checking accounts will soon grow into a full-fledged online bank.

In 1998, Allstate Bank received a federal charter from the Office of Thrift Supervision that allowed its customers to have their insurance premiums automatically deducted from their checking accounts. Now the company has received approval to expand its operations.

Beginning on Sept. 30, 2001, Allstate Bank will offer a range of retirement and savings products, including savings accounts, certificates of deposit (CDs), and FDIC-insured money market accounts online. Allstate Bank also plans to market and provide customer service for their savings products through Allstate's network of insurance and retirement planning agents.

Allstate Bank, a division of Allstate Financial Group, will allow customers to access their account information online, via telephone, automatic teller machines (ATMs), and at participating Allstate agencies starting with trained agents in California and New York.

"Offering banking products in addition to the insurance protection, retirement, and investment products we already provide is a natural extension of our business," says Edward Liddy, chairman, president, and chief executive officer of The Allstate Corp. "It's simply the next step in our strategy to become a leading financial services company."

While Allstate Bank will debut in Allstate offices in California and New York on Sept. 30, 2001, the company hopes to expand to agencies in all 50 states by the end of 2002.

Allstate now joins other insurers including Aetna, American International Group, The Hartford, Massachusetts Mutual Life Insurance Co., and State Farm Mutual Automobile Insurance Co. in taking advantage of the 1999 federal reform of financial service regulations by offering consumer banking services.