Hurricane Milton could result in losses of up to $100 billion for the global insurance industry, creating a surge in 2025 reinsurance prices that could boost some insurance companies’ shares, analysts said Wednesday.
A loss of $100 billion would put Milton on par with Katrina in 2005, analysts at Morningstar DBRS 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.