Allstate Q2 catastrophe losses hit $1.72bn
Allstate’s pre-tax catastrophe losses for the second quarter of 2026 reached $1.72 billion, driven by a June tally of $563 million, the insurer announced. The quarterly figure is below the $1.99 billion recorded in the same period last year, but it still represents a heavy start to the company’s annual aggregate risk period for its cat bond program.
The bulk of the second-quarter losses came from two months. April contributed $870 million in pre-tax catastrophe losses, followed by a relatively quiet May at $289 million. June then added another $563 million, bringing the total to $1.72 billion, or $1.36 billion after tax.
The losses are high.
June has historically been a rough month for Allstate. In 2025 the insurer reported $619 million in pre-tax losses for June; in 2024 it was $230 million; and in 2023 it reached $1.13 billion. The current June figure of $563 million sits slightly below the recent average for that month.
Allstate’s annual aggregate catastrophe bond program, under the Sanders Re structure, is now in a new risk period. The only active tranche is a $150 million Class B note issued through Sanders Re III Ltd. That tranche attaches at $4.78 billion of losses and covers up to $5.28 billion, excluding Florida.
It also carries a $50 million per-event deductible, meaning only catastrophe events that exceed that threshold count toward eroding the retention beneath the bond. The insurer also bought a new $1 billion aggregate excess-of-loss reinsurance arrangement as part of its 2026 renewal.
That layer attaches at $8.5 billion of losses and has a much smaller $1 million event deductible, which means most covered catastrophe events are expected to eat into the retention beneath that reinsurance. The result is that only an unknown portion of the $1.72 billion in pre-tax losses will erode the cat bond retention, while more of it likely chips away at the reinsurance layer.
The cat bond’s attachment point is still far above the current quarterly loss total, so the bond itself is not at immediate risk. But the growing aggregate loss count bears watching as the year continues. Allstate’s annual aggregate risk period began in April, and the company has already absorbed nearly 36% of the cat bond’s $4.78 billion attachment point in just three months.
If the second half of 2026 follows the pattern of recent years, with severe convective storms in the summer and fall, the cumulative loss total could climb faster than the average pace. Catastrophe loss data from insurers like Allstate is always backward-looking, but it also shapes the forward market for reinsurance and cat bonds.
A heavy first half could push up pricing for the next renewal cycle, particularly if the aggregate total continues to rise above historical averages. But the real variable is how many individual events clear the $50 million deductible and how many qualify under the lower deductible of the new reinsurance layer.
The bond market is likely to focus on the pace of erosion rather than the raw quarterly loss number. Allstate reported $1.36 billion in after-tax losses for the quarter. The company’s disclosure did not break down the losses by event type, but June’s severe weather in the central and eastern U.S. is a typical driver.
The insurer’s annual aggregate protection for 2026 remains substantial, but the year is still young. They have already absorbed a significant portion of the cat bond’s attachment point.
