Agencies
Destructive Hurricane Milton could result in losses of up to $100 billion for the global insurance industry, creating a spike in 2025 reinsurance prices that could boost some insurance companies’ shares, analysts said Wednesday.
The hurricane which landed on the Gulf Coast of Florida, leaving millions without power is potentially one of the most disastrous to hit the region, which is recovering from Hurricane Helene less than two weeks ago.
Insured losses from Milton could range from $60 billion to $100 billion if the hurricane makes direct landfall in the densely populated area of Tampa, analysts at Morningstar DBRS said.
A loss of $100 billion would put Milton on par with Katrina in 2005, they added, saying that insured losses would likely be "substantial but not catastrophic.” Katrina caused the largest insured loss from a hurricane.
The second-largest loss came from Ian, which hit Florida in 2022 and led to losses of around $60 billion.
RBC analysts estimated Milton would cause similar losses to Ian that should be "very manageable” for the insurance sector.
Analysts at Jefferies estimated a mid-double-digit billion-dollar insured loss would follow a major hurricane impact in one of Florida’s most heavily populated regions.
"A 1-in-100-year event is estimated by some to result in $175 billion in losses for landfall in the Tampa region and $70 billion in losses in the Fort Myers region,” they wrote in a note, outlining an extreme scenario.
S&P analysts noted on Wednesday the scope of damages "remains highly uncertain” but that it could match the $60 billion caused by Ian in 2022.