US insurer Allstate has disclosed today that it expects $1.4 billion of reinsurance recoveries will be made from its program after the recent Los Angeles, California wildfires.Allstate estimated its catastrophe losses for the month of January 2025 as being $1.08 billion pre-tax, or $849 million after-tax.This tallies with the firm’s earlier announcement that , pre-tax and net of reinsurance.The insurer had also said then that it expected a roughly $2 billion gross loss from the fires, with an estimated $900 million of reinsurance recoveries from its tower.

But Allstate also said that every additional $100 million in gross losses would only result in $10 million net, meaning further recoveries would be possible if the gross loss creeps higher.Almost all of the January cat losses for Allstate came from the wildfires, at $1.07 billion related to the event, the company said.It seems the gross loss estimate now stands at around $2.47 billion, given the $1.07 billion pre-tax net estimate and $1.4 billion of reinsurance recoveries.

Allstate said that its California wildfire event estimate includes certain reinsurance reinstatement premiums, as well as an estimated California FAIR Plan assessment, and is net of the estimated reinsurance recoveries of $1.4 billion.As we’d reported, .However, at this stage the wildfire losses while meaningful are only thought likely to drive a significant erosion of the attachment deductible for these cat bonds, effectively making them riskier over the rest of their annual aggregate term to the end of March.

It seems likely all of the reinsurance recoveries have come from the lower traditional layers of Allstate’s Nationwide occurrence tower.The lower multi-year layers of are structured to protect the insurer up to a $4.25 billion event, with the first $250 million in excess of $500 million retained by the company..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.