US insurer Allstate has announced an estimated pre-tax catastrophe loss burden for the month of February 2026 of $140 million, which has lifted the total for the current annual aggregate risk period that the firm’s catastrophe bonds run across to $3.072 billion.
With Allstate now reporting a pre-tax estimate of $140 million of catastrophe losses for the month of February, or $111 million, after-tax, this means that Allstate’s total catastrophe losses year-to-date in 2026 have reached $315 million, or $249 million after-tax.
It’s important to note that March’s losses could be higher due to outbreaks of severe convective storms that have been recorded across parts of the United States throughout this month, with brokers Gallagher Re and Aon stating that these events could drive insurance market losses into the low to mid-single-digit billions. It’s safe to assume Allstate policies will have been affected, given its expansive business footprint.
As we previously reported on the March event, a nearly uninterrupted series of severe weather events from March 5th to 11th had a profound effect on the central and eastern regions of the United States.
The Great Lakes area was among the hardest hit, experiencing multiple significant tornadoes that resulted in extensive destruction in Illinois, Indiana, and Michigan. Powerful winds and large hail impacted a vast area stretching from Texas to the Great Lakes, leading to considerable damage to infrastructure and property.
Aon emphasised that this event marked the most severe convective weather event of 2026 so far in terms of damage and financial cost terms. It may have implications for a number of aggregate cat bonds in the market, including perhaps Allstate’s, in terms of additional retention erosion.
When we last reported on Allstate’s annual aggregate risk period for its catastrophe bonds back in February, we revealed that January’s catastrophe losses had lifted the total to $2.932 billion at the time.
Now, after February, this figure has risen to $3.072 billion.
As we’ve said in previous articles, not all of these catastrophe losses will have qualified to erode the cat bond aggregate retentions. However, with last month’s losses from storm Fern narrowing the gap, and with losses from March expected to be meaningfully higher, this could narrow the gap even more, but with now only a few weeks 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. As a result, March losses will be the last to qualify under the cat bond aggregation terms.
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 are eligible, as some may arise from smaller events or pertain to subject business that is excluded from coverage under the cat bonds.
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.
Given that Allstate’s annual aggregate losses have only just reached the $3 billion mark for this current risk period, it would take significant additional impact from March’s severe weather to raise Allstate’s aggregate loss tally meaningfully.
With the risk period nearly over, the window for these cat bonds to face a loss is now rapidly closing.
