Hurricane Milton: Impact on Global Insurance and Reinsurance Market

Hurricane Milton, expected to hit Florida's Gulf Coast, could cause global insurance losses up to $100 billion. Analysts predict reinsurance price hikes in 2025, despite insured losses being substantial but manageable for the industry. Rising natural disaster costs lead insurers to raise rates and improve contract terms.

Hurricane Milton is poised to be a costly hit for the global insurance industry, with potential losses reaching $100 billion, according to analysts. The storm, classified as a Category 5 hurricane, is expected to make landfall on Florida's Gulf Coast late Wednesday or early Thursday.

While insured losses from Milton are projected to range between $60 billion and $100 billion, analysts at Morningstar DBRS have noted this would align Milton with Hurricane Katrina's 2005 impact, although the losses remain substantial yet not catastrophic.

In response to increasing losses from natural disasters exacerbated by climate change, insurers and reinsurers have been raising rates and modifying contract terms. The shares of reinsurers, such as Swiss Re and Munich Re, show potential for recovery as future pricing hardens.

(With inputs from agencies.)