Hurricane Milton could cost insurers up to $50 billion in losses

• Insured losses from Hurricane Milton could cost between $30 billion and $50 billion, analysts said.
• Before the storm hit, analysts predicted up to $100 billion in damage.
• Total insured losses globally exceeded $100 billion this year.

Hurricane Milton slammed into Florida on Wednesday, leaving insured losses estimated at $30 billion to $50 billion, analysts at Fitch Ratings said in a note Thursday.

Milton made landfall as a Category 3 hurricane, causing widespread damage to homes, flooding streets and leaving more than 3 million homes without power in the immediate aftermath.

At least 10 were confirmed dead by US Homeland Security Secretary Alejandro Mayorkas at a White House press conference on Thursday.

Milton’s insured losses could range from $30 billion to $50 billionaccording to Fitch, making it the largest since Hurricane Ian in 2022, which caused $60 billion in damage.

While the financial impact is significant, Florida insurers avoided a more harrowing scenario.

Before the storm hit, analysts at Morningstar DBRS told Reuters they had estimated up to $100 billion in insured losses if the storm had hit the densely populated Tampa region directly.

That would have rivaled the cost of Hurricane Katrina in 2005, estimated at $86 billion in 2020 — the largest insured loss from a hurricane, according to a 2020 Swiss RE report.

Before the storm, Jefferies analysts estimated potential losses at $175 billion in heavily populated areas like Tampa. Moody’s Analytics reported that $1.1 trillion in commercial property is at risk of wind damage.

Milton had weakened to a Category 1 hurricane by Thursday morning, according to the National Hurricane Center. Gov. Ron DeSantis said at a news conference Thursday that the state had avoided the “worst case scenario.”

While final losses have yet to be determined, Fitch analysts said the “surge in demand” that often follows major storms will be a key factor affecting the final cost of insured losses.

When multiple hurricanes strike in a short period, as with Helene and Milton, the demand for labor and materials for repairs and reconstruction skyrockets, which could increase total insured losses by at least 20 percent, according to Fitch.

According to a September report by Moody’s Analytics, insured losses from Hurricane Helene were between $20 billion and $34 billion.

Global reinsurers are likely to see an increase in claims payouts as the hurricanes hit just weeks away, according to a note from S&P Global on Wednesday.

Florida’s already fragile homeowner’s insurance market could weaken further due to back-to-back hits from Helene and Milton. Fitch analysts said local insurers could face insufficient reinsurance coverage to cover losses and increase premium rates.

While most insurers could cover damage from a typical major storm, anything beyond that could quickly deplete their reserves, especially if more storms hit this season, Fitch analysts wrote.

Global insured losses from natural catastrophes in 2024 have already exceeded $100 billion, according to Fitch. That’s well above the 10-year average of $37 billion. U.S. storms accounted for 70 percent of insured losses, according to an August report by the Swiss RE Institute.

Analysts at Fitch did not respond to Business Insider’s after-hours requests for comment.