December 3, 2023

Allstate, a large US insurer, reported an estimated catastrophe loss of $1.13 billion in June 2023, bringing total incident losses in the second quarter of this year to $2.7 billion pre-tax.

Allstate logo signThe company’s catastrophic loss experience for June included 18 events with estimated losses of $1.13 billion, 60 percent of which were related to four wind and hail events. This total was partly offset by a favorable reestimation of reserves from prior events, bringing the total down to $1.01 billion for the month, or $799 million after tax.

Catastrophe losses for the major insurer were close to $900 million in April and May, covering 12 events per month.

Combined with the June experience, Allstate is now reporting a pre-tax loss of $2.7 billion from a total of 30 catastrophic events in the second quarter of 2023.

As we discussed earlier, Allstate has an effective catastrophe bond with a $3.4 billion qualifying loss attached to it for the current annual risk period beginning April 1, 2023.

Determining how many of the 30 reported cat events qualify is never easy, and the fact that these cat bonds have a $50 million event deductible makes it even more difficult to determine how the $2.7 billion in reported cat losses will translate into eligibility for the terms of Allstate Saunders Re’s total cat bonds.

But it’s clear that $2.7 billion is a costly start to the current aggregate risk period for insurers, bringing aggregate catastrophe bonds into sharper focus.

We looked at Allstate’s reinsurance tower in a recent article.

Allstate’s latest catastrophe bond Sanders Re III Ltd. (Series 2023-2) deal went live in May, providing $370 million of multi-peril reinsurance for its subsidiary operating in Florida.

Today, the airline also reported unfavorable prior-year provision reestimations (excluding catastrophes) of $181 million for the second quarter of 2023, with about $148 million related to the National General brand, driven primarily by personal auto injury insurance, and about $31 million related to litigation activity in Florida.

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