US primary insurer Allstate is now looking for another very large slice of collateralized multi-peril catastrophe reinsurance protection from the catastrophe bond market, as the company has doubled the target size for its new issuance to $650 million, Artemis can report.Allstate returned to the cat bond market last month with a $300 million target for its latest sponsorship, seeking multi-peril and multi-year per-occurrence catastrophe reinsurance protection.This latest catastrophe bond will become the twenty-first in the Sanders Re series of deals sponsored by Allstate and the firm’s twenty-third cat bond in total that we’ve tracked and analysed.Now, sources have told us that this new Sanders Re 2025-1 catastrophe bond is set to become one of the largest from Allstate, as the target size has now been doubled.

As you might also expect, given how cat bond pricing has been moving, the spreads have also been adjusted down for all four tranches of notes that are being offered.This new deal will give Allstate multi-peril and per-occurrence reinsurance covering all US states except for Florida, to further build out its reinsurance tower with the support of the catastrophe bond market.Allstate will benefit from reinsurance for personal lines property and auto losses from multiple US perils, specifically named storm, earthquake, severe weather, wildfire, volcanic eruption, or meteorite impact events, on a per-occurrence and indemnity trigger basis, with two tranches of notes in-force for three years, the other two seeking longer five-year protection for the insurer.

When this deal launched, we were told that there were no sizes attributed to any of the tranches on offer, but that the overall target was to secure to least $300 million of reinsurance for Allstate.We understand that the Class A-1 tranche of three-year notes are now $175 million in size.With their initial base expected loss of 0.6221%, they had been offered with price guidance in a range from 4% to 4.25%, which has now been fixed at 4%.

The Class A-2 tranche of five-year notes are also $175 million in size.They come with an initial base expected loss of 0.6221% and had first been offered with price guidance in a range from 4.25% to 4.5%, but we understand that is now at 4.25%.The Class B-1 tranche of three-year notes are now $100 million in size.

These have an initial base expected loss of 0.8771% and had been offered with price guidance in a range from 4.5% to 4.75%, which has again fallen now to 4.5%.The final Class B-2 tranche of five-year notes are $200 million in size.These come with an initial base expected loss of 0.8771%, had first been offered with price guidance in a range from 4.75% to 5% and have now also seen their pricing fixed at the low-end of 4.75%, we are told.

As we explained in our first article on this new cat bond for Allstate, these new tranches will occupy parts of the fifth and sixth layers of Allstate’s reinsurance tower (perhaps extending into layers seven and eight), which had previously been filled out with single-year duration traditional reinsurance.As a result, Allstate seems to be looking to grow the cat bond market’s share of its reinsurance tower, as the major insurer seemingly recognises the benefits of collateralized, efficient and capital markets backed cover on a multi-year basis making up an increasing proportion of its risk transfer arrangements.Back in December, Allstate secured its second-largest cat bond ever, as a deal settled to provide the company $650 million of occurrence reinsurance protection.

This new 2025-1 issuance now looks set to become the joint second largest cat bond sponsored by Allstate ever.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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