US primary insurer Allstate has begun the new annual aggregate risk period, that its catastrophe bonds and excess of loss reinsurance are subject to, with a reported $870 million of pre-tax catastrophe losses in April 2026.The risk period for Allstate’s annual aggregate catastrophe bonds under its Sanders Re program, which sit in the nationwide aggregate tower, begins on April 1st each year.Currently, Allstate has annual aggregate protection from only one cat bond tranche, the $150 million Class B tranche of notes issued through its catastrophe bond sponsorship.For the new annual risk period, those notes attach at $4.78 billion of losses, running across a share to $5.28 billion for the insurer and cover losses across all US states except Florida.

They are subject to a $50 million per-event deductible, which means only catastrophe losses of $50 million or greater qualify to erode the retention sitting beneath their attachment.As a result, only an as yet unknown portion of the $870 million of pre-tax losses Allstate has reported for April will qualify towards eroding the cat bond retention.It’s worth highlighting that Allstate said that the $870 million of pre-tax catastrophe losses from April 2026, which translates to $687 million after-tax, were as a result of 10 wind and hail events.

Roughly 70% of the April cat losses were related to two events, the insurer explained, which means it’s likely around 70% of the total at least will contribute to erosion of the retained layer beneath the aggregate Sanders Re cat bond notes.However, , which attaches high up at $8.5 billion of losses.This new $1 billion of aggregate reinsurance limit though only features a much smaller $1 million event deductible, meaning that the majority of Allstate’s catastrophe losses are expected to qualify to erode the retention beneath this reinsurance layer, it is assumed.

Which means a reasonable percentage of the retention beneath the new aggregate excess of loss reinsurance may be eroded during this single month, which has proved to be among the most costly in a while, in catastrophe terms.April has always been one of the months with higher catastrophe losses reported by Allstate.In 2025 the insurer reported of pre-tax losses, in 2024 it was $494 million and in 2023 .

So this year’s $870 million of pre-tax catastrophe losses in April is close to the highest experience for the first month of its aggregate risk period in recent years for Allstate....

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