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Allstate’s 2019 cat losses lower than prior two years at ~$2.6bn


U.S. primary insurance giant Allstate has ended the full-year 2019 with its pre-tax catastrophe losses amounting to just under $2.6 billion, lower than the prior two years and so far leaving its aggregate reinsurance protection untouched.

Allstate logoAllstate has reported that its estimated catastrophe losses for the month of December 2019 only came in at $25 million before tax ($20 million, after-tax).

This has taken its catastrophe loss total for the fourth-quarter of 2019 to $295 million before tax ($233 million, after-tax).

The final two months of the year were particularly low impact, in terms of catastrophes for Allstate, with most of the quarter’s losses coming from October.

Allstate had reported that it suffered $680 million of pre-tax catastrophe losses in the first-quarter of 2019, followed by another $1.072 billion in the second-quarter and then $510 million in the third-quarter.

Adding in the fourth quarter’s $295 million takes the total for 2019, pre-tax, to just under $2.6 billion.

That compares to 2018’s roughly $2.9 billion and 2017’s roughly $3.2 billion, so despite some reasonable sized financial impacts from severe convective weather outbreaks and hail related loss events throughout 2019, Allstate has ended the year faring better.

However, last year Allstate suffered a huge amount of losses from California wildfires, with not far off a billion dollars of Q4 2018 catastrophe losses reported.

Had that scenario repeated itself this year Allstate may have been looking to its reinsurance panel for support.

As it is, the losses continue to run below the rate required to trigger the insurers aggregate reinsurance tower at this time and are still well below where reinsurance capital providers need to begin to worry.

Allstate’s Sanders Re Ltd. (Series 2018-1) catastrophe bond provides annual aggregate reinsurance protection across an annual risk period that begins in April.

Since the beginning of April 2019 (when the current risk period began) Allstate’s catastrophe loss tally has reached almost $1.88 billion, the run-rate of which remains aligned with modelled expectations for this layer of its reinsurance tower, with no threat to the cat bond currently.

Including Allstate’s more recent cat bond, the $300 million Sanders Re II 2019-1 issuance from March, as well as other changes made to its traditional reinsurance program this year, the firm’s nationwide aggregate protection now triggers at $3.54 billion of qualifying losses.

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