US primary insurer Allstate has for the second time lifted the target size of its latest catastrophe bond, with now $650 million in multi-peril catastrophe reinsurance protection sought from the capital markets through this issuance, Artemis can report.This new catastrophe bond will be the twentieth in the Sanders Re series of deals from Allstate the twenty-second cat bond that we’ve tracked and analysed from the insurer since it first tapped the insurance-linked securities (ILS) market back in 2007 and now looks like it could be the second largest cat bond the insurer has ever sponsored., initially targeting $350 million in multi-peril reinsurance protection covering all US states except for Florida from this Sanders Re II 2024-3 transaction., with the company lifting it 43% to a goal to secure $500 million of protection from this new cat bond issuance.

Now, sources have told us Allstate is seeking even more reinsurance from this Sanders Re II 2024-3 cat bond issuance.The target size has been increased again, with now $650 million of protection sought by the insurer, while at the same time the price execution looks very strong, as we’re seeing with recent cat bond issues, with both tranches now likely to price below their initial guidance.So it now looks like the reinsurance agreement under this cat bond will give Allstate potentially $650 million in reinsurance cover for certain losses from US (ex-Florida) named storm, earthquake, severe weather, wildfire, volcanic eruption, or meteorite impact events, on a per-occurrence and indemnity trigger basis, with one tranche of notes in-force for just over four years, the other for four years exactly.

The Class A tranche of notes were originally $150 million, which was then lifted to $200 million at the first update, but are now targeted to be $300 million in size, we are told.The Class A notes will be on-risk from January 1st 2025 through March 31st 2029 and they come with an initial expected loss of 0.88% and were first offered to investors with spread price guidance in a range from 4.25% to 4.75%.That price guidance was lowered to 4% to 4.25% and now we’re told has been fixed at the lower-end of 4%.

The riskier Class B tranche of note offering was originally $200 million in size, but then increased to $300 million at the first update, but has now increased again to $350 million, sources said.The Class B notes will be on-risk from April 1st 2025 through March 31st 2029, have an initial expected loss of 1.75% and were first offered to investors with spread price guidance in a range from 5.5% to 6.25%.That price guidance fell to a new range of 5.25% to 5.5% and now we understand this has also been fixed at the low-end of 5.25%.

Recall that, both of the tranches of cat bond notes can attach their coverage at $4.25 billion of losses to Allstate, but the difference is that the Class A notes will span an almost $2 billion layer of the reinsurance tower above that, while the Class B notes will only span a $950 million layer.Allstate is set to nearly double in size its latest catastrophe bond from the initial target, at pricing levels below the initial projections.Once again this shows a catastrophe bond market that is offering sponsors exceptional value at this time, with very strong execution for almost every recent deal, both in terms of the amount of reinsurance being secured and the price being paid for it.

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.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.