US insurer Allstate has announced estimated pre-tax catastrophe losses of $175 million for January 2026, primarily related to recent winter storm Fern in the United States, which has lifted the total for the current annual aggregate risk period for the firm’s catastrophe bonds to $2.932 billion.
As we reported last month, investment manager Twelve Securis had warned that the winter storm event and freezing temperatures could contribute to the gradual erosion of aggregate limits in certain catastrophe bonds.
Previously, Allstate had reported $594 million of pre-tax catastrophe losses for April 2025, then a further $777 million for May, an additional $619 million pre-tax for June, which took the company’s Q2 2025 total cat losses to $1.99 billion or $1.57 billion, after-tax.
At the end of Q3 2025, Allstate reported total catastrophe losses for the period were $558 million or $441 million, after-tax.
Then, following a relatively quiet quarter for cat losses, Allstate reported a pre-tax estimate of $209 million of catastrophe losses for Q4 2025, or $165 million after-tax.
And now, Allstate has reported a pre-tax estimate of $175 million of catastrophe losses for the month of January 2026, or $138 million, after-tax, which the firm noted is primarily related to winter storm Fern.
When we last reported on Allstate’s annual aggregate risk period for its catastrophe bonds back in January, we revealed that Q4 2025’s catastrophe losses had lifted the total to $2.757 billion at the time.
Now, after January, this figure has risen to $2.932 billion.
As we’ve explained before, not all of these catastrophe losses will have qualified to erode the cat bond aggregate retentions, but as mentioned, the steady accumulation from storm Fern narrows the gap significantly with two months remaining in Allstate’s annual aggregate risk period for its cat bonds.
Allstate’s aggregate reinsurance, which is all provided by some of its Sanders Re catastrophe bonds, begins accumulating qualifying losses over the year from April 1st.
Given a retention of $50 million per event as stipulated under the terms of these cat bonds, it is important to note that not all of these pre-tax losses will be eligible, as some may arise from smaller events or pertain to subject business that is excluded from coverage under the cat bonds. But clearly winter storm Fern appears to have been more than sufficient to eclipse that retention level.
After the completion of Allstate’s reinsurance renewal for 2025, which was finalised in time for April 1st, the aggregate Sanders Re cat bonds now sit above an attachment level of $4 billion for this current risk period.
This latest update from Allstate shows a slight uptick in loss activity for the new year, maintaining the steady erosion of the aggregate retention for its Sanders Re cat bonds but still leaving aggregated losses likely well below the attachment level at this time.
