Allstate’s pre-tax cat losses for current aggregate year reach $2.402bn after July

A busy July in catastrophe loss terms from severe weather activity has resulted in US insurer Allstate reporting $682 million in pre-tax losses, which has lifted the total across the current annual aggregate risk period for its catastrophe bonds to $2.402 billion so far.

It remains a relatively heavy start to the annual aggregate year for Allstate’s catastrophe bonds, in pre-tax overall catastrophe loss terms.

However, it’s important to remember that not all of these cat losses will qualify to erode the cat bond aggregate retentions.

Moreover, Allstate begun the new annual aggregate risk period, that its Sanders Re program catastrophe bonds and excess of loss reinsurance are subject to, with $870 million of pre-tax catastrophe losses in April 2026.

The company then reported a much lower $289 million in May, and an additional $563 million pre-tax for June.

For July 2026, Allstate has reported $682 million of catastrophe losses for the month pre-tax, or $539 million after-tax.

The insurer said that these losses came from 23 separate loss events, but reported that 75% of the months losses were related to two wind and hail storms, likely some of the severe convective storm activity that was seen in July across the US.

The insurer currently has annual aggregate protection from only one cat bond tranche, the $150 million Class B tranche of notes issued through its Sanders Re III Ltd. (Series 2023-1) catastrophe bond sponsorship.

As we’ve explained before, for the new annual risk period, those notes attach at $4.78 billion of losses, running across a share to $5.28 billion for Allstate, and also covers losses across all US states except Florida.

The Class B tranche of notes are also subject to a $50 million per-event deductible, which means only catastrophe losses that reach $50 million or greater qualify to erode the retention sitting beneath their attachment.

As a result, it’s impossible for us to know how much of July’s catastrophe losses have qualified under the terms of Allstate’s aggregate Sanders Re catastrophe bonds given the $50 million per-event deductible in-force within their coverage terms. While the loss run-rate is relatively fast so far this risk period, erosion will undoubtedly still be well below where the cat bond attachments sit at this time.

As part of its 2026 reinsurance renewal this year, Allstate purchased a new $1 billion aggregate excess of loss reinsurance arrangement, which attaches high up at $8.5 billion of losses.

However, this new $1 billion of aggregate reinsurance limit only features a smaller $1 million event deductible. It is safe to assume that this means that the majority of Allstate’s catastrophe losses for covered events are expected to qualify to erode the retention beneath this reinsurance layer, it is assumed.

Therefore, this means only an as-yet-unknown portion of Allstate’s $2.402 billion pre-tax losses will actually qualify towards eroding the cat bond retention, while more of it likely erodes the retention for the excess-of-loss reinsurance.

Meanwhile, Allstate shrunk its Florida reinsurance tower slightly at the mid-year renewals this year, but with the insurer sponsoring new catastrophe bonds the capital markets share of the tower backed through insurance-linked securities managed to rise steadily year-on-year.

Read all about Allstate’s recent reinsurance renewal in this article.

View details of every catastrophe bond ever sponsored by Allstate here.