Home Insurance Allstate cat bonds erosion slows with lower Q4 catastrophe losses

Allstate cat bonds erosion slows with lower Q4 catastrophe losses


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Allstate, the US primary insurer has reported that its annual catastrophe losses have been reduced by a significant amount for the fourth quarter of 2023. This has helped slow down the rapid increase of aggregate annual catastrophe losses over the first half of the risk period for its existing catastrophe bonds.

As we reported after the third-quarter of 2023, Allstate’s reported pre-tax aggregate catastrophe losses across the risk-period of its annual aggregate cat bonds had reached $3.88 billion.

Allstate’s annual aggregate catastrophe bond in-force can attach up to $3.4 Billion of qualifying losses. The annual risk periods for these cat bonds begin on April 1st 2023 and run until March 31st 2024.

The accumulated pre-tax cat losses Allstate had reported are already above that attachment level, but as we’ve pointed out before, it’s difficult to know just how the qualifying catastrophe loss tally sits at any point in time.

The lower Sanders aggregate cat bond, which attaches at $3.4 billion has a $50-million event deductible. This means that smaller losses are covered.

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