Hurricane Milton, which struck near Siesta Key, Florida on October 9 as a Category 3 storm, could result in nearly $100 billion in total economic damage, including both insured and uninsured losses, according to Morningstar DBRS.
The storm, with sustained winds of 120 miles per hour, hit areas with high reconstruction costs, notably impacting the Tampa metropolitan region, a major economic hub. The damage has led to expectations that insured losses could reach the upper end of Morningstar DBRS’s initial $30 billion to $60 billion estimate, similar to the losses from Hurricane Ian in 2022.
The insured damage from Milton includes losses from flooding, which are typically covered by the National Flood Insurance Program (NFIP) rather than private insurers. The Sarasota and Tampa Bay areas experienced significant storm surge and heavy rainfall, with NFIP-covered losses potentially contributing up to $10 billion of the total insured loss estimate.
According to Morningstar DBRS, while large national insurers may be relatively shielded from major financial hits, smaller and regional insurers could face greater pressure. Over recent years, many national insurers have scaled back or exited Florida’s residential insurance market due to profitability concerns. As a result, Citizens Property Insurance Corporation, the state’s public insurer, has become the largest residential insurer in Florida.
Although Citizens is expected to bear a considerable share of the losses, its financial stability remains intact due to its ability to levy assessments on existing policyholders. In contrast, smaller, local insurers may struggle with increased earnings pressure.
Moody’s RMS Event Response, meanwhile, estimates that the combined insured losses from Hurricane Milton and the earlier Hurricane Helene could range between $35 billion and $55 billion.
“The initial combined loss estimate is informed by Moody’s RMS Event Response’s rigorous approach to event insured loss estimation,” said Mohsen Rahnama, chief risk modeling officer at Moody’s. He noted that their estimates incorporate observational data, aerial imagery, and field reconnaissance, spanning over 2,000 miles of impacted regions in Florida.
“Estimating losses in these events is challenging, and it is important to consider all associated complexities and uncertainties, especially in the overlapping regions affected by both hurricanes,” Rahnama said.
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