Allstate’s July cat losses push pre-tax aggregate to $2.4B
Allstate’s pre-tax catastrophe losses for the current annual aggregate period have reached $2.402 billion after reporting $682 million in losses for July, according to the insurer. This figure reflects a busy month in terms of severe weather, with the majority of the damage stemming from two specific wind and hail storms. The insurer stated that 23 separate loss events contributed to the July total, which stood at $539 million after taxes.
Losses mount in 2026 risk period
It remains a heavy start to the annual aggregate year for Allstate’s catastrophe bonds in pre-tax terms. The company began the new risk period with $870 million in pre-tax catastrophe losses back in April 2026, followed by $289 million in May and an additional $563 million in June. The July figures add another significant layer to this total.
The insurer currently holds annual aggregate protection from only one cat bond tranche, the $150 million Class B notes issued through its Sanders Re III Ltd. (Series 2023-1) program. These notes attach at $4.78 billion of losses and run up to $5.28 billion, covering all US states except Florida. They are subject to a $50 million per-event deductible, meaning only losses exceeding this threshold qualify to erode the retention beneath the bond.
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While the loss run-rate is fast so far, it is impossible to know exactly how much of the July losses have qualified under the cat bond terms due to the high deductible. The majority of the July events likely did not reach the $50 million threshold required to trigger the bond coverage. This creates a gap between the total reported losses and the actual amount eroding the bond retention.
However, the insurer purchased a new $1 billion aggregate excess of loss reinsurance arrangement during its 2026 renewal. This layer attaches at $8.5 billion of losses and features a much smaller $1 million event deductible. This structure suggests that the vast majority of the current catastrophe losses are expected to erode the retention for this reinsurance layer rather than the cat bonds.
Capital markets share grows
Despite the heavy losses, Allstate adjusted its Florida reinsurance tower at the mid-year renewals, shrinking the traditional reinsurance portion slightly. The share of the tower backed through insurance-linked securities managed to rise steadily year-on-year, indicating a continued shift toward capital markets solutions for risk transfer. The company sponsors several catastrophe bond programs through its Sanders Re platform to manage this exposure.
