US primary insurer Allstate is back in the catastrophe bond market for the second time this year, this time seeking multi-peril Florida collateralized reinsurance protection from a $150 million or greater issuance.Allstate tends to sponsor two or three catastrophe bond each year, one of which is typically focused on sourcing capital markets backed reinsurance for its Florida primary insurance businesses.For Allstate, this latest catastrophe bond will be the twenty-second in the Sanders Re series of deals and the firm’s twenty-fourth cat bond in total that we’ve tracked and analysed.Just in March this year, Allstate secured $750 million of US nationwide, excluding Florida, reinsurance from a multi-peril deal, which became its joint largest cat bond ever sponsored.

Now, the insurer has returned looking to build out more cat bond protection within its Florida reinsurance tower in advance of its June renewal date.For its latest Florida-focused cat bond transaction, Allstate is again using the Sanders Re II Ltd.vehicle for the issuance of a single Class A tranche of Series 2025-2 cat bond notes, we understand.

The targeted $150 million of Class A Series 2025-1 notes Sanders Re II Ltd.will issue, will be sold to capital market cat bond investors and the proceeds used to collateralize reinsurance agreements between the issuer and Allstate’s Florida underwriting entities.As with its previous Florida cat bonds, we understand the beneficiaries of the coverage will be the firms’ Florida-focused underwriting subsidiaries Castle Key Insurance, Castle Key Indemnity, as well as the National General and Northlight brand entities.

We understand the new Sanders Re II 2025-2 catastrophe bond will provide those entities with a three year source of fully-collateralized reinsurance on a cascading indemnity and per-occurrence trigger basis.The covered perils will be the typical Florida named storm, earthquake, severe weather, wildfire, volcanic eruption, and meteorite impact that Allstate has always covered with its Florida focused cat bonds, we are told.The $150 million of Series 2025-2 Class A principal-at-risk notes issued by Sanders Re II Ltd.

would attach their coverage above $95 million of losses, participating in a $300 million layer above that of the Florida reinsurance tower, which gives them room to upsize the deal should investor appetite prove strong.It’s important to note that there could be inuring reinsurance to these notes, perhaps its FHCF coverage, so the effective attachment point may be higher, which the risk metrics associated with the notes and their cascading coverage nature suggest.The $150 million of Series 2025-2 Class A notes come with an initial attachment probability of 2.77% and an initial base expected loss of 1.74%, while they are being offered with price guidance in a range from 7% to 7.75%, sources said.

It’s good to see Allstate coming to market with a larger Florida cat bond this year.In 2024 the company sponsored a $74.5 million zero-coupon cat bond issuance, the catastrophe bond, which sat lower down and ultimately we believe to have paid out in full on losses from hurricane Milton.So, the $150 million target for a new Florida cat bond with a significantly lower expected loss metric, suggests Allstate sees value in building more cat bond protection into its Florida reinsurance tower for the 2025 hurricane season.

, with over $3.3 billion of cat bond protection in-force at this time.You can read all about this from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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