U.S. primary insurer Allstate has revealed it has raised the top of its Nationwide excess catastrophe reinsurance tower for 2024 to just over $7.9 billion, an increase of around $1 billion compared to 2023.
Last year, Allstate’s Nationwide Excess Catastrophe Reinsurance Program covered it for losses of up to $6.92 billion after retentions of between $500 million and $750 million.
Now, for 2024, the retentions have increased, with Allstate’s Nationwide catastrophe reinsurance tower providing coverage for loss events up to $7.90 billion, after retentions of $500 million to $1 billion.
The Nationwide Program includes occurrence coverage in contracts from both the traditional reinsurance and ILS markets, while annual aggregate protection is included in six contracts supported by the ILS market.
It is worth noting that the agreements provide multi-line catastrophe coverage in every state except Florida, where coverage is only provided for personal lines automobile.
At the same time, there has also been a noticeable increase in the total cost of Allstate’s property catastrophe reinsurance programs.
The company revealed that, excluding reinstatement premiums, its total cost of reinsurance was $286 million in Q1 2024, compared to $219 million in Q1 2023, and $144 million in Q1 2022.
Allstate additionally disclosed that its reinsurance arrangements cost the U.S. primary insurer $1.02 billion in 2023, which was up significantly from $788 million in 2022.
As we covered last year, the increase in costs can largely be attributed to the effects of the hard reinsurance market.
Also, catastrophe bonds now occupy portions of Allstate’s reinsurance tower from $5.46 billion right the way up to $7.7 billion, with the Sanders Re cat bond program filling out a significant proportion of the upper-layers of the insurer’s program, another contributor to the increased costs.
