Large US primary insurer Allstate has disclosed total catastrophe losses for the month of July of $587 million, which includes an initial loss estimate of $226 million for Hurricane Beryl.
Allstate’s catastrophe losses for July include 20 events estimated at $542 million, pre-tax or $428 million, after tax, which suggests some favourable prior period development in the month to bring it down from the $587 million.
Of the total, almost 39% relates to losses from hurricane Beryl, which became the earliest Category 5 hurricane on record in the Atlantic before making three landfalls, first at Carriacou Island, Grenada on July 1st, then Tulum, Mexico on July 5th, and finally Matagorda, Texas on July 8th.
Insured loss estimates for the storm have varied, with some going as high as $4.5 billion in the US alone, while insured losses in the Caribbean and Mexico are expected to be much lower.
Allstate has a comprehensive Nationwide excess-of-loss catastrophe reinsurance program that was renewed for the current wind season, providing the insurer with coverage for events up to $7.9 billion of loss less retentions of $500 million and $1 billion.
Beryl losses of an estimated $226 million appear unlikely to result in any excess-of-loss recoveries, but the July catastrophe losses will have further eroded some of the aggregate retention beneath the carrier’s catastrophe bonds, which sit within the Nationwide tower.
As we understand, pre-tax cat losses since April 1st, which is when Allstate’s aggregate cat bond risk-period began, now amount to $2.64 billion, although this is likely lower as the bonds feature a $50 million per-event deductible.
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