US primary insurer Allstate has secured its targeted $150 million of multi-peril and fully-collateralized reinsurance protection for Florida from its latest catastrophe bond, as the new Sanders Re II Ltd. (Series 2025-2) issuance has been priced at the low-end of guidance, Artemis can report.
Allstate recently returned to the catastrophe bond market for its regular May sponsorship of an issuance designed to provide catastrophe reinsurance protection for its Florida insurance underwriting entities.
The initial target was to secure $150 million of multi-peril cascading coverage and we’ve now learned that goal has been achieved, as the Sanders Re II 2025-2 cat bond priced yesterday to provide Allstate that level of protection.
For the insurer, this new catastrophe bond will become the twenty-second in the Sanders Re series of deals and Allstate’s twenty-fourth cat bond in total that we’ve tracked and analysed over the years.
Read about every cat bond sponsored by Allstate in our Deal Directory.
The now confirmed as $150 million of Class A Series 2025-2 notes Sanders Re II Ltd. will issue are set to provide reinsurance to Allstate’s Florida-focused underwriting subsidiaries Castle Key Insurance, Castle Key Indemnity, as well as the National General and Northlight brand entities.
The notes will provide those entities with a three year source of fully-collateralized reinsurance on a cascading, indemnity and per-occurrence trigger basis, covering certain losses from the perils of named storm, earthquake, severe weather, wildfire, volcanic eruption, and meteorite impact, which are the same perils Allstate has always covered under its Florida focused cat bonds.
The $150 million of Series 2025-2 Class A notes that Sanders Re II Ltd. is now set to issue come with an initial base expected loss of 1.74% and were first offered to cat bond investors with price guidance in a range from 7% to 7.75%.
We’re now told that at pricing yesterday, the initial risk interest spread for the notes was priced at 7%, so the low-end of the initial guidance range.
As a result, Allstate has extended its Florida focused cat bond backed reinsurance protection at the lower-end of price expectations, a good result for the insurer.
Having only sponsored a higher-risk $74.5 million zero-coupon cat bond issuance for Florida coverage in 2024, the Sanders Re II Ltd. (Series 2024-2) catastrophe bond which ultimately we believe to have paid out in full on losses from hurricane Milton, it’s good to see Allstate building out Florida cat bond coverage higher up in its reinsurance tower for the state.
Allstate is currently listed as the second largest sponsor of outstanding catastrophe bonds in our leaderboard chart, with over $3.3 billion of cat bond protection in-force at this time.
You can read all about this Sanders Re II Ltd. (Series 2025-2) from Allstate and every other catastrophe bond issuance in the extensive Artemis Deal Directory.
