Allstate seeks $200m US multi-peril cover with Sanders Re 2024-1 cat bond

Allstate, the US primary insurance company, has returned to the catastrophe bond market with a $200 million of multi-peril reinsurance target for a Sanders Re III Ltd. (Series 2024-1) issuance.

Once completed, this will be the eighteenth successful catastrophe bond issuance from Allstate that we have listed in our extensive Deal Directory to be sponsored by Allstate.

Allstate tends to sponsor US multi-peril cat bonds that exclude Florida, of which this is one, as well as some Florida only cat bonds.

With its latest transaction, Allstate is using Sanders Re III Ltd. for issuance of a single $200 million tranche of Series 2024-1 cat bond notes, we are told

These notes will be sold to investors and the proceeds used to collateralize a reinsurance agreement between the issuer, Sanders Re III, and Allstate.

That reinsurance agreement will cover the primary insurer against personal lines property and auto losses from multiple US perils, specifically from named storm, earthquake, severe weather, wildfire, volcanic eruption, or meteorite impact events, across all US states excluding Florida.

The coverage from this Sanders Re III 2024-1 cat bond will provide Allstate with reinsurance on a per-occurrence and indemnity trigger basis over a more than four year term, from the date of issuance running to maturity at the end of March 2028, we are told.

The $200 million of Class A notes on offer would attach at $5.25 billion of losses to Allstate and cover a share of losses over a $500 million layer of the insurers reinsurance tower, leaving room for this to upsize if investor demand is sufficient.

The Sanders Re III 2024-1 cat bond notes come with an initial attachment probability of 0.95%, an initial expected loss of 0.8884% and are being offered to investors with spread price guidance in a range from 5.75% to 6.5%, we understand.

It’s good to see Allstate back with a new catastrophe bond issuance around the end of the year, as with the insurers main nationwide reinsurance tower typically renewed for April 1st it leaves time for the company to come back for more cat bond coverage in advance of that, if the market is conducive to do so.

You can read all about this Sanders Re III Ltd. (Series 2024-1) from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory.