The back-to-back strikes of Hurricanes Milton and Helene have left a significant impact on the insurance industry, with Moody’s RMS estimating insured losses for both storms between $35 billion and $55 billion.
However, the global property insurance market is better positioned to withstand large hurricane losses now compared to several years ago.
Mike Prindle (pictured), SVP & leader of complex property at CAC Specialty, told Insurance Business that the market won’t be plunged back into “hard” conditions following the active hurricane season.
While there may be some small effects on rates and availability, he said the overall momentum in the market has been positive, with more competition and reduced rates for buyers, and that this trend is expected to continue into 2025.
“These storms are likely going to be much more of a Q4 earnings event than a capital event,” Prindle said.
These devastating events have prompted urgent reflections on how insurers should adapt to better manage natural catastrophes.
Milton and Helene were unusual not just in their severity but in their timing. The storms occurred two weeks apart and affected overlapping areas, amplifying the challenges faced by insurers and risk managers.
For Prindle, these circumstances brought several lessons into sharp focus. “I think there are always lessons to be learned, particularly for insurers dealing with hurricanes,” he said.
“Insurers often secure reinsurance for all catastrophe perils, but, for hurricanes specifically, the key takeaway is to manage portfolios within the limits of their reinsurance strategy.
“Avoid overextending in areas without adequate protection. By consistently applying this approach, insurers can continue offering coverage for such exposures and avoid the knee-jerk reactions seen in the past.”
The consequences of failing to do this, Prindle said, are all too familiar: market disruptions and sudden changes in coverage availability that can exacerbate the fallout of natural disasters.
For risk managers, the main takeaway is to review and improve their hurricane preparedness plans after each storm, identifying what worked well and what needs to be adjusted.
Hurricane preparedness plans rely on a network of individuals and vendors, but when that network is stretched thin, as with these closely timed storms, recovery efforts can falter.
“For example, after one storm, restoration teams may be fully engaged in cleanup efforts, leaving limited resources for a second storm,” Prindle illustrated. “This strain can disrupt even the best preparedness plans, creating significant challenges for risk managers."
The domino effect of successive disasters can stress systems that might otherwise function smoothly. An iterative approach to catastrophe preparedness serves not only to strengthen an organization’s resilience but also to build trust with insurers.
While no two hurricanes are identical, patterns and trends often emerge from catastrophic events that inform future strategies. This year’s storms highlighted the varied nature of hurricane impacts, Prindle said.
“Helene was much more of a flood event, while Milton was much more of a wind event,” he noted.
Landfall locations also play a pivotal role. Moreover, ancillary risks like tornadoes and hail, often overshadowed by the hurricanes themselves, add layers of cost and complications to recovery.
However, Prindle said there’s reason to be optimistic about the future, as insurers have adapted by better managing their exposure.
“Catastrophe rates are significantly higher than six years ago, and insurers have improved how they manage line sizes and reinsurance structures for cat-exposed risks. These adjustments have strengthened the market’s resilience,” he said.
“Looking ahead to 2025, I don’t foresee major changes. If anything, there’s positive momentum—greater competition, improved rates, and reduced costs for buyers. While this year’s storms may have a slight impact, they’re unlikely to revert the market to the tough conditions of 2023."
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