Insurance Law » Allstate Resets Aggregate Cat Bond

Allstate Resets Aggregate Cat Bond


May 11, 2023

There have been numerous changes to Allstate Insurance’s catastrophe reinsurance program in the first quarter of 2023. It has increased the actual limit coverage provided at the higher layers and reduced it at the bottom. Its catastrophe reinsurance arrangements are incrementally filled throughout the year. The best comparison is Allstate’s last disclosure for the end of December 2022, when the tower extended to $7.01 billion of coverage, while the upper layer of $400 million was only partially filled by a single cat bond tranche. That meant about 80 percent of that layer would have been retained had losses run that high up the tower for Allstate. Now, the top of its excess catastrophe reinsurance tower is slightly lower at $6.924 billion, but each layer is now 90 percent placed to that level. This is mainly due to its catastrophe bonds having been reset higher, as well as the purchase of one new traditional layer to fill out the very top. Allstate has also reset its aggregate catastrophe bond attachments higher for the 2023/4 aggregate year, with the lowest attaching aggregate Sanders cat bond now attaching at $3.4 billion. That is considerably higher than the last risk period’s $2.7 billion.

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