Moody's Rating Services says Allstate's plan to restructure $3 billion in debt is credit positive and will lower its cost of capital heading into hurricane season.
The move is part of the Northbrook, Ill., company's enterprise risk management program aimed at reducing the effects of losses from catastrophes and weather-related events on both earnings and capital.
Over the past two years, Allstate has enhanced its catastrophe reinsurance program, which includes issuance of a $350 million catastrophe bond this year. It also strengthened underwriting in homeowners insurance nationwide with non-renewal of less profitable business and high-single digit premium rate increases.
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