Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Allstate’s 2017 cat loss burden escalates, Colorado hail drives impacts


U.S. primary insurer Allstate has reported another heavy monthly toll for catastrophe losses in May 2017, reporting estimated pre-tax impacts from severe weather and cat events of $403 million for the month, with the Colorado hail storm event driving more than half of the total.

Large hail image from D-7 RoofingFor the second quarter months of April and May 2017 Allstate has now reported estimated pre-tax catastrophe losses of $638 million, which added to the $781 million of catastrophe losses from the first-quarter, takes the insurers year-to-date tally to $1.419 billion.

In May Allstate saw 14 events, resulting in an estimated loss of $392 million, pre-tax, on top of which some unfavorable reserve development on prior month catastrophe losses takes the May total to $403 million.

The single severe hail event that occurred on May 8th 2017 in Colorado has caused more than half of Allstate’s catastrophe losses for May, an event that is estimated to have caused a $1.4 billion insurance and reinsurance industry loss.

According to analysts at Keefe, Bruyette & Woods, Allstate has around 1.2% of its direct written premiums exposed to catastrophe events in Colorado, while there are plenty of other insurers with much higher proportions of the premiums located in the State.

That suggests that many more insurers will be reporting enlarged catastrophe loss impacts from the Colorado hail storm, and while it may not result in a major national player like Allstate calling on its catastrophe reinsurance, that event could cause some other primary insurers to call on reinsurance support.

With losses from severe convective storm related weather events having reached £3 billion in may and $12 billion so far in 2017, it’s no surprise that Allstate’s bill has risen so far this year.

It’s unclear how this escalating loss total might be affecting any aggregate reinsurance retention that Allstate has in place, at this time, but it could be eroding any retained provisions that sit beneath the firms open market reinsurance coverage.

Only a month left until our ILS Asia 2017 conference, tickets on sale here.
ILS Asia 2017

Register today for ILS Asia 2023, our next insurance-linked securities (ILS) market conference. Held in Singapore, July 13th, 2023.

Artemis ILS Asia 2023 - Insurance-linked securities conference in Singapore

Get a ticket soon to ensure you can attend. Secure your place at the event here!

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.