Hurricane Milton allegedly incurs insurance companies an estimated $60 billion in damages.
Hurricane "Milton" is projected to burden insurers and reinsurers up to $60 billion, with insured damages anticipating to fall between $45 and $60 billion, as per a Morningstar DBRS report. Milton, which hit Florida recently, positions itself amongst the five most pricey hurricanes to strike the U.S., similar to "Ian" two years ago. Approximately $10 billion of this is attributed to flood damage, which is handled by the federally-backed National Flood Insurance Program (NFIP). Morningstar DBRS hypothesizes that Milton's overall financial impact could reach almost $100 billion.
Due to regular hurricane occurrences, several U.S. insurers have opted out of Florida lately, resulting in losses on their policies. Consequently, Florida's state-owned Citizens Property Insurance Corp (Citizens) has emerged as the largest property insurer in the state.
In the perspective of enormous reinsurers, "Milton" should be handling-able, given that the overall U.S. hurricane season has been relatively calm until now, the report suggests. Nevertheless, prices for reinsurance protection against natural catastrophes, which had barely escalated recently, are likely to rise again, particularly for the U.S. market.
Reinsurers might face challenges in the future due to the increasing frequency of destructive storms. For instance, the Atlantic Hurricane Season of 2021 witnessed a record-breaking 21 named storms, proving that storms pose significant threats to insurers and reinsurers.
