US insurer Allstate has announced an estimated pre-tax catastrophe loss for the fourth quarter of 2025 of $209 million, which lifted the total for the current annual aggregate risk period for its catastrophe bonds to $2.757 billion while the run-rate of losses slowed in recent months.
Allstate had reported $594 million of pre-tax catastrophe losses for April 2025, then a further $777 million for May, an additional $619 million pre-tax for June, which took their Q2 2025 total cat losses to $1.99 billion or $1.57 billion, after-tax.
Then at the end of Q3 2025, Allstate reported total catastrophe losses for the period were $558 million or $441 million, after-tax.
And now Allstate has reported a pre-tax estimate of $209 million of catastrophe losses for Q4 2025, or $165 million after-tax.
This figure also includes $80 million of pre-tax catastrophe losses that Allstate has reported for December 2025.
When we last reported on Allstate’s annual aggregate risk period for its catastrophe bonds back in September, we revealed that August’s catastrophe losses had lifted the total to $2.387 billion at the time.
Now, after September and Q4 2025, this figure has risen to $2.757 billion.
It’s important to remember that not all of these catastrophe losses will have qualified to erode the cat bond aggregate retentions.
Allstate’s aggregate reinsurance, which is all provided by some of its Sanders Re cat bonds, begins accumulating qualifying losses over the year from April 1st.
As we’ve explained in previous articles, with a $50 million per-event retention under the terms of those cat bonds, not all of these pre-tax losses will qualify, as some may have come from smaller events or affected subject business that is not covered 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.
This latest update from Allstate regarding their estimated catastrophe losses for Q4 2025, shows how the run-rate has slowed considerably, which we assume means that the catastrophe bonds will remain some billions away from attaching at this time, due to the much lower losses seen in the later months of 2025.
Meanwhile, a number of equity analysts from investment banks including Goldman Sachs, J.P. Morgan and KBW have all commented today that Allstate’s catastrophe losses have run well-behind their expectations for the fourth-quarter.
This heavily indicates that Q4 2025 was likely a more profitable quarter than previously anticipated for large nationwide US insurance firms like Allstate.
This also indicates that lower than expected catastrophe losses have been ceded to reinsurance capital providers during the period too.
