US primary insurer Allstate has completed the placement of its 2025-2026 Nationwide Excess Catastrophe Reinsurance Program, lifting the top of the tower by around $1.6 billion to $9.5 billion of loss, excess a $1 billion retention.
At this year’s renewal, Allstate’s per occurrence excess agreements placed in the traditional reinsurance market consist of contracts providing the firm with coverage for events up to $4.25 billion, excess a $1 billion retention.
Multi-year contracts then provide reinsurance coverage for events above $4.25 billion of losses, with single-year agreements filling capacity around both the multi-year and insurance-linked securities (ILS) contracts for events above $4.25 billion.
In comparison, for 2024-2025, the top of Allstate’s Nationwide Excess Catastrophe Reinsurance Program extended to $7.9 billion of loss excess retentions of $500 million and $1 billion.
Last year, the multi-year and per occurrence excess agreements placed in the traditional reinsurance market consisted of multi-year contracts providing coverage up to $4.25 billion in excess of retentions of $500 million to $1 billion and exhausting at $4.25 billion per loss occurrence, as well as two eight-year term contracts, and six single-year term agreements filling capacity around the multi-year and eight-year term contracts.
For both years, coverage is subject to the percentage of reinsurance placed in each of its agreements.
Taking a deeper look at this year’s reinsurance program, the contracts providing coverage for events up to $4.25 billion excess the $1 billion retention, includes new multi-year contracts with $1.13 billion of placed limits, effective June 1 2025 to May 31 2028, and new single-year contracts with $66 million of placed limits, effective June 1 2025 to May 31 2026.
The $3.25 billion placed limit also includes existing multi-year contracts with $1.03 billion of placed limits, effective June 1 2024 to May 31 2027, and existing multi-year contracts with $1.03 billion of placed limits, effective June 1 2023 to May 31 2026.
These contracts, and the other multi-year and single-year agreements outlined below, reinsure the firm’s personal lines property and automobile losses arising out of multiple perils including, but not limited to, hurricane, windstorm, hail, tornado, earthquake, fires following earthquakes and wildfires in all states, excluding personal lines property in the state of Florida, explains Allstate.
For 2025-2026, the multi-year contracts providing reinsurance above $4.25 billion of losses provide a combined $336 million of placed limits, comprised of a $105 million contract, effective April 1 2021 to March 31 2029, a $131 million contract, effective April 1 2021 to March 31 2029, and newly placed $100 million contract, effective April 1 2025 to March 31 2028.
The single-year reinsurance contracts fill capacity around both the multi-year and Allstate’s catastrophe bonds, which for the most part sit above $6.25 billion of losses with a portion sitting above $4.25 billion but below $5.25 billion of losses.
These single-year per occurrence excess agreements provide a combined $2.28 billion of placed limit in excess of a $4.25 billion retention, and were all placed this year. This includes a $600 million contract, effective June 1 2025 to March 31 2026, a $950 million contract, a $494 million contract, and a $242 million contract, all effective April 1 2025 to March 31 2026.
Allstate explains that these contracts “provide additional gap coverage as the layer shifts down in attachment, subject to the $4.25 billion minimum retention level as lower layer limits are exhausted.”
“The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, was $257 million and $286 million in the first quarter of 2025 and 2024, respectively. The total cost of our catastrophe reinsurance program during 2024 was $1.11 billion,” said the firm.
You can see Allstate’s 2025-2026 reinsurance tower below:
So, for 2025-2026, Allstate has secured more reinsurance limit for this tower when compared with the previous year, with much of the changes above the $4.25 billion of loss as single and multi-year contracts extend to near and at the top of the tower, with a slight change to the retention.
Last year, single-year contracts provided a combined $1.61 billion of placed limit, but for 2025-2026 single-year contracts provide a combined $2.28 billion of placed limit.
Earlier today, Allstate reported its results for the first quarter of 2025, posting a combined ratio of 97.4% amid record gross cat losses of $3.3 billion, offset by $1.1 billion of reinsurance recoveries.
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