Active June sees Allstate report Q2 2023 catastrophe losses of $2.7bn

Large U.S. insurer Allstate has reported catastrophe losses of an estimated $1.13 billion for June 2023, taking total losses from events for the second-quarter of the year to $2.7 billion, pre-tax.

The firm’s catastrophe loss experience for June includes 18 events estimated at $1.13 billion, of which 60% relate to four wind and hail events. The total is somewhat offset by favourable reserve reestimates for prior events, taking the total for the month down to $1.01 billion, or $799 million after-tax.

In both April and May, the primary insurer’s catastrophe losses approached $900 million, which each month including 12 events.

Add the experience in June, and Allstate is now reporting Q2 2023 catastrophe losses of $2.7 billion pre-tax, from a total of 30 events.

As we’ve discussed previously, Allstate has catastrophe bonds in-force that would attach at $3.4 billion of qualifying losses, for the current annual risk period that began on April 1st, 2023.

It’s never straightforward to tell how many of the 30 events reported would qualify, and the fact these cat bonds have a $50 million event deductible in place makes it more difficult to know with certainty how the $2.7 billion of reported cat losses would translate into those qualifying under the terms of Allstate’s Sanders Re aggregate cat bonds.

But clearly, at $2.7 billion, it’s been a costly start to the current aggregate risk period for the insurer, bringing the aggregate cat bonds into greater focus.

We examined Allstate’s reinsurance towers in a recent article.

Allstate’s latest cat bond, the Sanders Re III Ltd. (Series 2023-2) transaction, which provides its subsidiaries operating in Florida with $370 million of multi-peril reinsurance, went live in May.

Today, the carrier also reported that unfavourable prior year reserve reestimates, excluding catastrophes, reached $181 million in Q2 2023, of which approximately $148 million is related to the National General brand, primarily driven by personal auto injury coverages, and approximately $31 million related to litigation activity in the state of Florida.