Hurricane Milton will cost insurers up to $100 billion: analysts

Insured losses from Milton could range from $60 billion to $100 billion if the hurricane makes direct landfall in the densely populated Tampa area, according to Morningstar DBRS analysts.

Losses of $100 billion would put Milton on par with Katrina in 2005, they added, and insured losses would likely be “substantial but not catastrophic.”

Katrina caused the largest loss from a hurricane for insurers.

Losses of $60 billion would be similar to those from Hurricane Ian, which hit Florida in 2022, RBC analysts said Wednesday, adding that this estimate for Milton should be “very manageable” for the sector.

“The market seems to be pricing in an impact similar to that of Hurricane Ian, of $60 billion in losses for the sector in 2022,” RBC analysts noted.

Insurers and reinsurers — which insure insurers — have responded to rising losses from natural catastrophes in recent years by raising rates and excluding higher-risk business.

“Improved conditions for reinsurance contracts, greater diversification of profits and increased reserves should put the sector in a better position than before,” RBC analysts say in a note.

Barclays analysts estimated this week that insured losses from the hurricane could exceed $50 billion.