Allstate’s top-end target for Sanders Re II cat bond lifts to $200m

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Insurance giant Allstate’s top-end target for its latest catastrophe bond transaction has been lifted to as much as $200 million, while at the same time price guidance for the Sanders Re II Ltd. (Series 2020-2) cat bond deal has been lifted to the top-end of initial guidance.

Allstate logoAllstate returned to the catastrophe bond market a few weeks ago with a transaction seeking Florida specific multi-peril reinsurance for its Castle Key subsidiaries operating in the state.

The Sanders Re II Ltd. special purpose insurer was targeting the issuance of a single $150 million Series 2020-2 Class A tranche of notes.

We’re now told that the target has been lifted, with up to $200 million of reinsurance protection being sought by Allstate.

To recap, the three years of reinsurance protection that this cat bond provides will be on an indemnity trigger, per-occurrence basis and is structured to cascade as other reinsurance beneath is eroded.

The reinsurance covers losses from the multiple perils of named storm, earthquake, severe thunderstorm, volcanic eruption, meteorite impact and wildfire impacting the state of Florida across subject business of homeowners, condo, rental and boat owners personal lines property insurance policies underwritten by Allstate’s two Castle Key insurers.

The now up to $200 million of notes being issued have an initial expected loss of 0.61%. They were initially offered to cat bond funds and investors with price guidance in a range from 5% to 5.5%, but we’re now told that this pricing has been fixed at the top-end of guidance, at 5.5%.

It’s no surprise to see the pricing move higher, given the Florida reinsurance market is firming rapidly as the renewal approaches.

Which means it’s encouraging to see the targeted size increase as well, as it shows Allstate is relatively confident of being able to secure the additional support for its underwriting operations in the state despite market conditions.

We’ll update you on the eventual size of this deal once this new Sanders Re II Ltd. (Series 2020-2) catastrophe bond comes to market.

You can read about this and every other cat bond ever issued by Allstate in the extensive Artemis Deal Directory.

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