Helene losses mount as Hurricane Milton approaches Florida

Enjoy free access to the best ideas and information – selected by our editors.

(Bloomberg) — Estimates for insured losses from Hurricane Helene have climbed to $14 billion, even as insurers brace for more devastation from Hurricane Milton.

Estimates of private market insured losses from Hurricane Helene range from $8 billion to $14 billion, with the best estimate around $11 billion, according to Moody’s RMS Event Response. That’s higher than the $6.4 billion estimated last week by catastrophe modeling firm Karen Clark & ​​Co.

Helene made landfall in Florida’s Big Bend region in late September as a Category 4 hurricane with sustained winds reaching 140 miles per hour. Storm wreaked havoc inland as far north as Ohio, bringing catastrophic flooding, killing more than 200 people and leaving millions without power.

Florida is now bracing for Milton, a Category 4 hurricane heading toward the Tampa Bay region that could affect an increasingly populated area that includes Orlando. Milton is expected to be more expensive than Helene.

Read more: Insurance losses from Hurricane Helene are expected to reach $6.4 billion

Milton has the potential to generate tens of billions of dollars in insured losses if it lands in the Tampa Bay area, according to early projections by Bloomberg Intelligence analysts. When Hurricane Ian hit Florida in 2022, it generated insurance losses up to 65 billion dollars.

Higher premiums

In recent years, rising insurance losses in Florida, linked to rising litigation costs and more frequent climate disasters, have driven some insurers out of business or out of state, forcing homeowners to pay higher premiums.

While recent reforms to the local legal system have helped improve the situation, Milton’s potential damage could cause further imbalance.

“The Florida market has shown positive signs of improvement since the legislature passed important reforms to reduce abuse of the legal system in the state, but it remains to be seen what impact Hurricane Milton will have on the market following the significant damage caused by Hurricane Helene as repairs are made. they’re just getting started,” said Logan McFaddin, vice president of state government relations at the Home Insurance Association of America.

Insurance stocks fell on Monday, with local insurers the hardest hit. Shares of Universal Insurance Holdings Inc. in Fort Lauderdale closed 20%. The insurer has an 8.45% market share in the local homeowner’s insurance market, according to the latest market data from credit rating agency AM Best.

Shares of American Coastal Insurance Corp., which last year generated 95 percent of gross premium written in Florida, fell 15 percent. Another local insurer, Heritage Insurance Holdings Inc., with a third of its in-force premiums coming from Florida last year, fell 23 percent.

The presence of larger insurers in Florida, such as Progressive Corp., Allstate Corp. and Chubb Ltd., each posted low single-digit share declines.

Insurers recouped some of Tuesday’s declines, with the KBW Insurance Index rebounding more than 1 percent as of 12:04 a.m. in New York.

In emailed statements to Bloomberg, Allstate and Progressive said they were mobilizing their disaster teams to support customers after the storm.

Citizens Property Insurance Corp., Florida’s public insurer of last resort and the state’s leading provider of homeowner’s insurance policies, urges policyholders to heed the advice of local authorities.