Hurricane Milton could add to insurers’ $60b NatCat losses in 2024

Global reinsurers could see their claims payouts rise.

Hurricane Milton's economic and insured losses remain uncertain, largely dependent on its landfall location and magnitude, said S&P Global Ratings. 

Currently a Category 5 storm, Milton is expected to hit the Tampa Bay area late on 9 October or early on 10 October. This is the second major hurricane to impact the US in two weeks, following Hurricane Helene.

S&P Global Ratings is reviewing industry-insured-loss scenarios for both US primary insurers and global reinsurers. For reference, Hurricane Ian, a Category 4 storm, caused $60b in insured losses in 2022.

Global reinsurers, facing substantial exposure, could see their claims payouts rise, but losses may still fall within their 2024 catastrophe budgets. 

First-half natural catastrophe losses for the insurance sector reached $60b, significantly above the 10-year average of $37b. 

Despite these challenges, the global reinsurance sector remains resilient, with strong capital buffers in place.

The sector's combined earnings for 2024 are forecasted at $44.8b, with a catastrophe budget of $19.2b. A rise in investment income is also expected to provide additional financial support.