Allstate shrinks Florida reinsurance tower slightly, but catastrophe bond cover expands

US primary insurer Allstate has shrunk its Florida reinsurance tower slightly at the renewals this year, but with new catastrophe bonds sponsored the capital markets share of the tower backed through insurance-linked securities has risen year-on-year.

After the mid-year 2025 reinsurance renewals, Allstate had a Florida catastrophe reinsurance tower that extended to cover $1.1 billion of losses.

Of the 2025 tower, Allstate had $150 million of limit from the multi-year Sanders Re II Ltd. (Series 2025-2) and another $66 million of protection from a one-year riskier cat bond sponsorship, the Sanders Re II Ltd. (Series 2025-3) transaction.

As part of the slightly smaller 2026 Florida reinsurance tower, Allstate still has the $150 million of limit from the Sanders Re II Ltd. (Series 2025-2) cat bond issuance.

But the insurer added another $200 million of Florida reinsurance limit from its May 2026 sponsorship of the Sanders Re III Ltd. (Series 2026-2).

As we also reported, Allstate added another $30 million of Florida focused cat bond coverage with its latest one-year deal, the Sanders Re III Ltd. (Series 2026-3) issuance that came to market in June 2026.

As a result, across the 2026 Florida catastrophe reinsurance tower, this year Allstate has $380 million of cat bond limit, up from $216 million in the 2025 Florida cat tower.

Showing that the capital markets and insurance-linked securities investors continue to play an increasingly important role for the insurer, in protecting its Florida underwriting entities Castle Key Insurance Company, Castle Key Indemnity Company and affiliates.

Back to the Florida reinsurance tower. Allstate had lowered the top of its Florida reinsurance tower to $1.285 billion at June 2023, then lowered it further to just $890 million at the mid-year 2024 renewals, before increasing it to $1.1 billion at mid-year 2025.

Now, after the June 2026 reinsurance renewals, Allstate’s Florida catastrophe reinsurance tower tops out at $934 million of losses on a per-occurrence basis, while the retention remains just $30 million.

You can see Allstate’s renewed Florida reinsurance program on the right.

At the lowest layers of the tower, attaching above the $30 million retention, Allstate has $55 million of reinsurance, $25 million of which is from traditional reinsurers, the remaining $30 million being from the lower-down cat bond, Sanders Re III 2026-3.

Attaching at $85 million of losses is where Allstate’s protection from the Florida Hurricane Catastrophe Fund kicks-in for 2026, which provides $149 million of limits, 90% placed.

In addition, wrapping around the FHCF coverage, Allstate has $150 million of limit placed with traditional reinsurers for a first event, with one automatic reinstatement of limits and a separate contract offsetting those reinstatement premiums.

Attaching at $369 million of losses is where the multi-year Sanders catastrophe bonds sit, together providing $350 million of capital markets backed protection.

Running from $719 million up to exhaustion of the Florida tower at $934 million, is $215 million of first-event limit placed with traditional reinsurers, which has one automatic reinstatement and a separate contract again offsets those reinstatement premiums.

Adding to the protection for its Florida underwriting businesses, if the full tower is exhausted Allstate has second event limit of up to $450 million of property losses, again less a $30 million retention.

Outside of the Florida reinsurance program, Allstate has also renewed its National General Lender Services standalone reinsurance program.

For 2026 into 2027, this reinsurance provides coverage for $350 million of loss less a $70 million retention, with one automatic reinstatement. While additional FHCF coverage for Florida hurricane events gives combined protection of up to $443 million of losses less a $63 million retention.

Last year, the National General program was providing $410 million of reinsurance limits, including the inuring FHCF protection.

In addition, the National General flood excess of loss reinsurance has increased to provide $60 million of limits after a $20 million retention, with one reinstatement, so slightly more than last year’s $50 million of limits.

Allstate’s Kentucky earthquake reinsurance arrangement remains flat at $28 million of limits over a $2 million retention, while the excess and surplus earthquake reinsurance contract still provides reinsurance on a 100%
quota share basis with no retention, the same as last year.

Allstate has continued to lean into the catastrophe bond market in 2026, building on its Florida protection at the mid-year, as well as its Nationwide cover that was renewed earlier this year.

As a result, Allstate currently has $3.73 billion of catastrophe bond coverage outstanding, according to our leaderboard of cat bond sponsors.

Read all of our reinsurance renewal news coverage.