Fitch has estimated Hurricane Milton’s insured losses will range from US$30 billion to US$50 billion, the largest amount since Hurricane Ian hit Florida in 2022.
Hurricane Milton made landfall on Thursday morning near Siesta Key, Florida, as a Category 3 storm, swept across central Florida, and exited the east coast as a Category 1, leaving behind significant economic and insured losses due to high winds, storm surges, heavy rainfall, tornadoes, and flooding.
Large-rated insurers with Florida exposure should expect Milton to have an impact on their Q4 and 2024 earnings, as projected insurance losses reach reinsurance attachment points, shifting a significant portion of the burden to the reinsurance market.
Fitch predicts that Milton will push global insured industry losses in 2024 past US$100 billion for the fifth consecutive year, with the elevated catastrophe losses likely curbing any potential rate declines in the property catastrophe market in 2025.
Ultimate losses will also depend on demand surge, as Milton follows closely on the heels of Helene — a Category 4 hurricane that devastated the Southeast US two weeks earlier.
Furthermore, the agency says the property market may face rising premium rates depending on final Milton losses and additional catastrophe claims in 2024, though the significant reinsurance price hikes seen in 2023 are unlikely due to the current more stable pricing environment.
Milton's losses are unlikely to exhaust catastrophe reinsurance coverage for most Florida specialists, but insurers with concentrated risks or significant modeling errors may face higher-than-expected gross losses, leaving them vulnerable if additional storms hit Florida this hurricane season.
However, Milton is not likely to affect credit for rated P&C insurers and global reinsurers given very strong capital levels.
