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Hurricane Milton could cost insurers $60 billion

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Hurricane Milton could cost insurers  billion



Hurricane Milton could cost insurers $60 billion | Insurance Business America















Devastation in Florida triggers massive losses, with reinsurance rates expected to spike


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Hurricane Milton has battered Florida’s Gulf Coast, with analysts forecasting potential insurance losses of up to $60 billion, a blow that could ripple across the global insurance industry.

The Category 5 storm made landfall late Wednesday, with more than one million residents having been evacuated in what is now one of the most devastating hurricanes to strike the region in recent history.

According to RBC Capital analysts, the losses are expected to be comparable to those from Hurricane Ian, which hit Florida in 2022. They estimate that the industry is well-positioned to absorb the financial impact.

The $60 billion estimate would rank Milton’s impact among the most costly hurricanes, following Ian and Hurricane Katrina in 2005. The Swiss Re Institute notes that insurers have faced rising losses from such events in recent years.

In response, insurance companies and reinsurers – who provide insurance for insurers – have raised prices and tightened terms for higher-risk properties. RBC analysts believe the sector is now better equipped to handle these situations, citing improved reinsurance contracts, diversified earnings, and stronger financial reserves. Meanwhile, Barclays analysts project Milton’s insured losses could exceed $50 billion, further heightening concerns about the storm’s financial fallout.

Shares in global reinsurers such as Swiss Re, Munich Re, and Lloyd’s of London players like Beazley, Hiscox, and Lancashire have declined in recent days. However, RBC remains optimistic, suggesting share prices will rebound once reinsurance rates rise.

“It’s only a matter of time before shares regain lost ground as prospects of harder pricing at the subsequent renewals set in,” RBC said.

Experts expect this storm will lead to further rate increases in 2025.


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