Allstate, a US primary insurance company, opted to reduce the amount of protection for its Florida excess catastrophe reinsurance tower at its mid-year renewal, while the carrier renewed numerous other contracts with some slight adjustments.
Last year, the Florida cat reinsurance tower provided coverage up to $1.1 billion excess a $30 million retention, and included coverage for events up to $951 million of loss less a $30 million retention on a first event occurrence, in addition to the FHCF, which provided a combined $153 million of limit.
For 2026-2027, the Florida cat coverage extends to $934 million with an unchanged retention of $30 million, and includes a consideration of the mandatory FHCF contracts.
The Florida programme’s risk period started on June 1st, 2026, and is in effect until May 31st, 2027, and reinsurers Allstate’s Castle Key Insurance Company, Castle Key Indemnity Company, and affiliated companies personal lines property excess catastrophe losses in the State of Florida.
Allstate retains losses below $30 million, and for losses above this but below $85 million, first event coverage provides $55 million of reinsurance, of which $25 million is from the traditional market and $30 million from its Sanders Re III 2026-3 catastrophe bond. Allstate explains that second event coverage of $55 million is placed entirely with traditional reinsurers.
Above the $85 million and up to $369 million, sits three mandatory FHCF contracts, 90% placed, providing $149 million of limits, which amounts to $134 million of placed limit, for qualifying losses to personal lines property in Florida caused by storms declared as hurricanes by the US National Hurricane Center.
Wrapped around the FHCF contracts, single-year reinsurance contracts provide $150 million of limit placed with traditional reinsurers for a first event, with one automatic reinstatement of limits.
Higher up the tower, between $369 million and $719 million, multi-year Sanders Re cat bonds provide Allstate’s subsidiaries with $350 million of reinsurance coverage secured from the capital markets, which further diversifies its reinsurance protections.
Reinsurance agreements between $719 million and the top-end $934 million of the tower provide $215 million of limit placed with traditional reinsurers for a first event, with one automatic reinstatement of limits.
Allstate confirms that were a large, single event to completely exhaust its Florida reinsurance tower, which you can see below, the programme has additional limit available for a second event up to $450 million of property loss less a $30 million retention.
The primary insurer also renewed four other reinsurance programmes at the mid-year renewal, including its National General Lender Services Standalone Program. For 2026-2027, this contract provides reinsurance coverage for catastrophe events up to $350 million of loss less a $70 million retention, whereas for 2025-2026 this programme provided coverage up to $410 million less a $90 million retention.
The National General Flood Excess of Loss Reinsurance contract was renewed at June 1 to provide coverage of $60 million subject to a $20 million retention, which is slightly higher than last year’s coverage of $50 million less a $20 million retention.
The Kentucky Earthquake Excess Catastrophe Reinsurance contract was renewed on the same terms as last year for 2026-2027, providing $28 million of placed limits subject to a $2 million retention.
Similarly, the Excess & Surplus Earthquake contract again provides reinsurance on a 100% quota share basis with no retention.
The National General Lender Services Standalone programme, National General Flood Excess of Loss Reinsurance programme, and Kentucky Earthquake Excess Catastrophe Reinsurance programme all include one automatic reinstatement of limits with additional premium due.
“The total cost of our property catastrophe reinsurance programs, excluding reinstatement premiums, during the second quarter and first six months of 2026 was $378 million and $686 million, respectively, compared to $305 million and $562 million in the second quarter and first six months of 2025,” said Allstate.
The insurer’s Nationwide occurrence cat reinsurance was renewed at April 1, when Allstate made adjustments to its aggregate protection.
