Milton’s $50b losses won't impact rated insurers: Fitch Ratings

This will bring 2024’s total global insured losses to over $100b.

Hurricane Milton is unlikely to affect the credit of rated property and casualty insurers and global reinsurers due to their strong capital levels, according to Fitch Ratings. 

However, Florida property insurance specialists, which are not rated by Fitch, could be vulnerable if losses exceed their reinsurance limits.

Milton made landfall in Florida as a Category 3 hurricane, causing significant economic and insured losses through high winds, storm surge, rainfall, tornadoes, and flooding. 

Insured losses are estimated between $30b and $50b, making Milton the largest insured loss event since Hurricane Ian in 2022, which resulted in $60b of losses. 

These losses will affect fourth quarter (Q4 2024) and 2024 (FY 2024) earnings for insurers with exposure in Florida, pushing many losses to the reinsurance market.

Insured losses may also increase by 20% or more due to the demand surge following Hurricane Helene two weeks earlier, which has strained labour and material supply. 

This will bring 2024’s total global insured losses to over $100b, marking the fifth consecutive year this threshold has been surpassed. 

As a result, potential rate declines in 2025 are unlikely, with (re)insurers expected to maintain pricing discipline.