Swiss Re Insurance-Linked Fund Management

PCS - Emerging Risks, New Opportunities

Allstate adds $893m May catastrophe losses to heavy April burden


Allstate, the large U.S. primary insurer, has reported catastrophe losses for the month of May of an estimated $893 million, slightly higher than the $872 million reported in April.

allstate-sign-logoCombined, Allstate has now recorded almost $1.8 billion in catastrophe losses for the first two months of the annual aggregate term for some of its Sanders cat bonds and the reinsurance these transactions provide.

The annual risk periods all start on April 1st and run until March 31st.

As in April, losses for the month of May include 12 events estimated at a cost of $893 million, 70% of which relates to two wind and hail events, somewhat offset by favourable reestimates for prior events.

Including the favourable development in prior period catastrophe events, Allstate’s May catastrophe loss load stands at $885 million or $699 million, after-tax.

However, as we noted for the April total, prior period reserve improvement cannot lower the qualifying losses under the new risk period, so it will be a portion of the $893 million that counts under the cat bonds terms, or the almost $1.8 billion for April and May combined.

With estimates approaching $900 million for each of April and May, initial overall catastrophe losses for the new annual risk period are approaching $1.8 billion after just two months could be significant. Although, it is always difficult to tell how many of the now 24 events reported by the insurer would qualify.

For the current annual risk period that began on April 1st, Allstate has catastrophe bonds in-force that would attach at $3.4 billion of qualifying losses.

These now have a $50 million event deductible in place, which makes it harder to tell how these reported catastrophe losses would translate into those qualifying under the terms of the Sanders aggregate cat bonds. But, it is a costly start to the aggregate risk period for Allstate, that is certain.

In May, Allstate completed the placement of its latest cat bond under its Sanders Re SPI, the $370 million Sanders Re III Ltd. (Series 2023-2) transaction providing its subsidiaries operating in Florida with multi-peril reinsurance protection.

You can read about Allstate’s reinsurance towers in our recent article.

Also read from yesterday: Allstate’s Florida cat bond facing hurricane Ian loss has maturity extended.

Artemis Live - ILS and reinsurance video interviews and podcastView all of our Artemis Live video interviews and subscribe to our podcast.

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance video content and video interviews can be accessed online.

Our Artemis Live podcast can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.