Allstate now targets up to $1bn of limit across Sanders Re III & Sanders Re IV cat bonds

Allstate is now targeting the most limit from a single visit to the catastrophe bond market in its history, with now up to $1 billion of fully-collateralized multi-peril per-occurrence catastrophe reinsurance sought from the dual issuances of Sanders Re IV Ltd. (Series 2026-1A) and Sanders Re III Ltd. (Series 2026-1B) cat bond series.

With these dual cat bond issuances, from two separate special purpose insurers, Allstate is seeking broad multi-peril catastrophe reinsurance across the United States excluding the state of Florida, so additions to its main nationwide reinsurance tower.

For Allstate, these deals take the number of Sanders Re issuances we’ve analysed to twenty-four, while it makes now twenty-six cat bonds in total that we’ve tracked from the company.

Read about every cat bond sponsored by Allstate in our Deal Directory.

When Allstate returned to the catastrophe bond market for these issuances in January, the initial target was to secure up to $500 million of collateralized and multi-year reinsurance limit from the capital markets.

We’re now told that the target sizes have been lifted from their initial $250 million per-series, to now between $450 million and $500 million per-series of notes, so a combined target for between $900 million and $1 billion of catastrophe reinsurance limit.

Which if successfully secured will be the largest amount of cat reinsurance limit Allstate has ever secured from the cat bond market in a single visit.

There continue to be four tranches of notes on offer across the issuances through the more recently set up Sanders Re IV Ltd. and an older vehicle Sanders Re III Ltd., with now between $450 million and $500 million of limit sought from each vehicle’s issuance, so split across two classes of notes per series, we understand.

All four tranches of notes will provide Allstate with per-occurrence and indemnity triggered catastrophe reinsurance protection across all US states except for Florida, covering personal lines property and auto losses from multiple US perils, specifically named storm, earthquake, severe weather, wildfire, volcanic eruption, or meteorite impact events, the same perils as its typical nationwide ex-Florida cat bond deals.

The goal continues to be to secure a large amount of both four year and five year reinsurance limit from this issuance, as much as $1 billion being the updated target.

Under the Sanders Re IV Ltd. vehicle, two tranches of Series 2026-1A notes are being offered with a target to secure $450 million to $500 million of limit between them.

A tranche of Series 2026-1A Class A-1 notes (four year term) and Series 2026-1A Class A-2 notes (five year term) both come with the same initial base expected loss of 0.6851% and were initially offered with price guidance for a risk interest spread of between 3.25% and 4.25%. We’re now told that spread guidance has been updated at 3.5%.

Under the Sanders Re III Ltd. vehicle, two tranches of Series 2026-1B notes are being offered, again with the same target to secure from $450 million to $500 million of reinsurance limit between them.

A tranche of Series 2026-1B Class B-1 notes (four year term) and a tranche of Series 2026-1B Class B-2 notes (five year term) both come with the same initial base expected loss of 1.8874% and were first offered with price guidance for a risk interest spread of between 4.5% and 5.5%. We’re now told that in this case the spread guidance has been revised to 5%.

As a result, Allstate looks on-track to secure at least $900 million of reinsurance limit across these issuances, perhaps as much as $1 billion. While the pricing looks likely to be finalised below and at the mid-point of guidance, reflecting strong execution of this large catastrophe bond issuance.

We’ve listed these in separate entries in our Deal Directory, given the two issuance vehicles used.

You can read all about the Sanders Re IV Ltd. (Series 2026-1A) and Sanders Re III Ltd. (Series 2026-1B) cat bonds from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory.