Merrill Lynch & Co. cited margin pressure as the primary reason for its downgrade — to "neutral" from "buy" — of Allstate Corp. Merrill warns that a "less accommodating" claims environment, lower prices, and higher marketing expenses could compress margins for the Northbrook, Ill.-based insurer. Ultimately, that pressure could keep the company from meeting its earnings estimates, Merrill contends. Allstate [ticker: ALL] has a market capitalization of $37 billion.

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