Allstate August cat load takes YTD losses to $3.67bn

Large US primary insurer Allstate has reported estimated catastrophe losses of $272 million ($215 million after-tax) for the month of August, taking total catastrophe losses for August year-to-date to $3.67 billion ($2.90 billion, after-tax).

Catastrophe losses for August include 15 events resulting in an estimated $306 million in losses. A significant portion of these losses, approximately $75 million, stemmed from a hail event in Calgary, Canada.

This $75 million figure factors in the cost of reinstating reinsurance coverage and accounts for an expected $225 million recovery from reinsurance claims.

Allstate had purchased Canadian catastrophe reinsurance protection at the Jan 2024 renewals, providing it with total coverage of CA$355 million excess a CA$75 million retention.

For July, the insurer reported its total catastrophe losses reached $587 million, which included an initial loss estimate of $226 million for Hurricane Beryl.

The figure included 20 events estimated at $542 million, pre-tax or $428 million, after tax, which suggests some favourable prior period development in the month to bring it down from the $587 million.

In its latest report, the firm disclosed its total catastrophe losses for July and August were $814 million or $643 million, after-tax.

Allstate estimated catastrophe losses for June at $1.4 billion ($1.1 billion after-tax), taking total catastrophe losses for May year-to-date to $2.62 billion.

Allstate’s catastrophe losses for April and May 2024 reached $1.89 billion, a significant increase compared to the nearly $1.7 billion reported for the same period in 2023.

The 2024 figure includes $494 million in losses for April, with the remaining amount attributed to May’s events. The estimated catastrophe losses for March were $328 million ($259 million after-tax, which included six events estimated at $343 million ($271 million after-tax); this was reportedly somewhat offset by favourable reserve reestimates for prior events.

During the first five months of 2024, Allstate’s pre-tax catastrophe losses reached $2.62 billion. This figure is notably lower than the approximately $3.4 billion in catastrophe losses the insurer faced during the same period in 2023.

The difference is largely attributed to a significantly higher catastrophe loss burden in the first quarter of 2023, which amounted to $1.69 billion, compared to $731 million in losses seen in the first quarter of 2024.

For January, Allstate had estimated catastrophe losses of $325 million and for February cat losses were below the $150 million reporting threshold.

Its also worth noting that at the mid-year reinsurance renewals, the insurer opted to shrink the size of its 2024-2025 Florida excess catastrophe reinsurance program, and added $90 million of limit to the top of its Nationwide coverage.

For the second consecutive year, Allstate has chosen to decrease its reinsurance coverage specifically for Florida, while it continues to increase its reinsurance protection in other parts of the United States.

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