Insurers could pay out as much as $50 billion for hurricane damage in Florida, pushing total insurance losses in the state above $100 billion by 2024.
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| The devastating power of Hurricane Milton in Florida (USA). Photo: Greg Lovett/USA TODAY Network . |
Hurricane Milton made landfall in Florida on the evening of October 9, killing at least 10 people and leaving millions without power. To date, this is one of the most devastating storms to hit the region, which has yet to recover from the devastating damage caused by Hurricane Helene less than two weeks ago, Reuters reported.
While it did not cause sea levels to rise as alarmingly as initially predicted, Governor Ron DeSantis said the southern coast of Tampa Bay is still in a state of widespread flooding.
Jefferies experts call this a “once in a century” natural disaster event and has the potential to cause up to $175 billion in damage to Tampa Bay and $70 billion to the Fort Myers area.
According to a report by the US credit rating agency Fitch, Hurricane Milton could cause insurance companies to compensate 30-50 billion USD to property owners in Florida, the second largest loss in the history of the insurance industry, after Hurricane Katrina in 2005. This could push the total insurance compensation cost in this area to exceed 100 billion USD this year.
Additionally, the cost of repairing and rebuilding property after a storm is expected to increase insurance premiums by at least 20%, according to Fitch estimates based on past events.
Shares of major reinsurers Swiss Re, Munich Re and Beazley have fallen this week on concerns about damage from Hurricane Milton, but analysts at RBC expect their shares to recover soon as premiums rise in upcoming renewals.
These disaster scenarios were previously developed by Lloyd’s of London to test the insurance industry’s ability to respond to serious natural disasters.
Milton is now the third hurricane to hit Florida this year. According to Moody’s estimates, Hurricane Helen, which hit the state earlier, could cost private insurance companies in the US $8-14 billion .
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