Allstate adds about $600 million to top of Florida tower with help from cat bonds
Completing its June 1 reinsurance renewal for 2022, U.S. primary insurance giant Allstate extended the top of its Florida excess of loss catastrophe reinsurance tower by nearly $600 million.
Allstate’s Florida Excess Catastrophe Reinsurance Program covers its in-state underwriting subsidiaries, including Castle Key Insurance Company, Castle Key Indemnity Company and other affiliated entities.
The protection provided is entirely against losses from Allstate’s Florida personal property portfolio and the catastrophe reinsurance tower is a mix of traditional coverage and catastrophe bond.
In the June 1, 2022 reinsurance renewal, Allstate raised the top of its Florida catastrophe reinsurance tower by nearly $600 million, with its recent Sanders Re III catastrophe bond providing a significant improvement and filling in some of the layers. tricks for society.
This new cat bond provided $287.5 million in valuable reinsurance coverage to Allstate, especially as it spans multiple layers of the reinsurance tower, including filling the bottom under the Florida Hurricane Catastrophe layer. Fund for the insurer.
Allstate’s renewed catastrophe reinsurance tower in Florida now provides coverage for up to $1.8312 billion in losses for the carrier, about $592 million more than the $1.2391 billion tower of the previous year.
Of that $1.8 billion plus the Florida Reinsurance Tower, Allstate’s catastrophe bonds now provide $487.5 million of the limit, given that its $200 million Sanders Re II 2020-2 cat bond dollars is still in effect.
In the traditional market, which likely also includes some ILS-backed or guaranteed reinsurance capacity, Allstate has $1.3 billion in limit placed this year, up from $939.1 million the year before.
There is a lower layer at the HFCF providing 71.1% of the $126.9 million upper bounds at a retention of $40 million, which sits alongside the riskier $37.5 million layer of the brand new bond Allstate cat.
Three excess layers above provide a combined limit of $1.14 billion, while a multi-year layer above provides $264.1 million of upper limits at a retention of $169.6 million, is placed at 10% and sits next to Class B 2022-2 Catastrophe Bond Notes.
Finally, a gap-filling layer provides $50 million limits and also sits next to the 2022-2 Class B bond notes.
FHCF coverage is higher than the prior year, in line with the tower’s growth, and Allstate has continued to opt for a 90% coverage.
See details of every catastrophe bond ever sponsored by Allstate here.