Revisions cut reinsurance costs for Allstate

US insurer Allstate calculates it should save about $260m a year on the cost of its current property cat reinsurance protections, effective from June 1. The total annualized cost of all the group’s cat reinsurance programmes for the year beginning June 1, 2008 will be about $660m a year or $165m a quarter. The comparable cost for the year beginning June 1, 2007 was $920m a year. Allstate says the reduction is due in part to its reduced exposure in Florida after its non-renewal activity of the past year. The total cost of Allstate’s cat reinsurance during calendar year was $896m. For the first half of 2008, Allstate spent $450m on cat reinsurance protection, and the group expects it will pay $330m for the second half of 2008. Allstate says it continues to attempt to capture the cost of its reinsurance in premium rates, where allowed by state regulatory authorities.