Hurricane Milton: A Billion-Dollar Storm Surge for Insurers

Hurricane Milton, a Category 4 storm, threatens up to $100 billion in losses for insurers upon hitting Florida's Gulf Coast, affecting reinsurance prices in 2025. Analysts predict substantial but manageable losses, comparing it to previous hurricanes. Insurers see potential gains from higher rates and stronger contract terms.

Analysts have warned that Hurricane Milton could cause up to $100 billion in losses for the global insurance industry, prompting a predicted surge in reinsurance prices in 2025. The Category 4 hurricane is set to strike the Gulf Coast of Florida, and its impact is feared to rival that of Hurricane Katrina.

According to Morningstar DBRS, if Hurricane Milton makes landfall near Tampa, insured losses could range between $60 and $100 billion. Similar losses are expected to be manageable for insurance companies, despite concerns it could strain primary insurers' catastrophe budgets for 2024.

This potential catastrophe has already affected the share prices of global reinsurers like Swiss Re and Munich Re, although analysts suggest the insurance sector is better positioned now, thanks to improved rates and diversified earnings.

(With inputs from agencies.)