US primary insurance company Allstate has added another $ 227 million in pre-tax catastrophe losses for the month of July 2021, which is much higher than the $ 145 million the previous year.
Allstate had closed the second quarter of 2021 with $ 952 million of catastrophic losses before taxes, which was a relatively high quarter for the company, with large hail loss events in April and May as the main drivers, as well as some losses due to severe first quarter weather events, including winter storm Uri.
The third quarter has started with a higher toll than a year ago, as Allstate has reported 18 specific catastrophic weather-related events, which together generated the $ 227 million of pre-tax losses, which would be $ 179 million after taxes.
The 18 catastrophic events in July 2021 cost Allstate $ 211 million before taxes, while the other $ 16 million came from losses that led to unfavorable prior-period reserve estimates.
As a reminder, Allstate has been recovering from the reinsurance provided for its $ 300 million Catastrophe Bonus Sanders Re II 2019-1 transaction this year.
The main driver was winter storm Uri and freezing Texas weather, and after the second quarter, the erosion of the $ 300 million catastrophe bond had reached $ 253 million, with only $ 47 million of capital remaining to cover any continuation of increased losses and development that Allstate has been experiencing in the wake of this event.
It is possible that the development of the previous period reported for July could exacerbate this even more, although we cannot be sure.
As a result, Allstate’s cat bond aggregate coverage trigger is now higher, with more than $ 4 billion of qualified losses required in the new annual risk period to file new claims on the remainder of its 2019 notes or above. your Sanders Re 2020 cat bonus.
Adding the catastrophic second-quarter pre-tax losses with July brings the current risk period losses to nearly $ 1.18 billion, which means there is still a way to go before this year’s losses trigger further recoveries. added reinsurance under the Allstate National Tower.