Allstate - You're in good hands

This past January Allstate disclosed its reinsurance agreements for its countrywide personal lines property and auto insurance business, excluding Florida, and for personal property excess losses in California for fires following earthquakes. Allstate expects the reinsurance agreements to cost the company an approximate total of $600 million per year. This represents an increase of approximately $400 million per year over our current cost once these agreements are fully implemented and effective.

Allstate utilizes reinsurance to reduce exposure to catastrophe risk and to help manage capital, while lessening earnings volatility and improving shareholder return, and to support the required statutory surplus and the insurance financial strength ratings of certain subsidiaries. Allstate purchases significant reinsurance where we believe the greatest benefit will be achieved relative to our aggregate countrywide exposure. The price and terms of reinsurance and the credit quality of the reinsurer are considered in the purchase process, along with whether the price can be appropriately reflected in the costs that are considered in setting future rates charged to our policyholders.

For additional information on Allstate's reinsurance agreements, click here.

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