Recent reports from Fitch Ratings indicate that Hurricane Milton's destructive force has resulted in insured losses ranging between $30 billion and $50 billion. This figure surpasses the impact of Hurricane Ian in 2022, which caused $60 billion in insured losses along a similar path.
It is important to note that the estimated losses provided by Fitch do not encompass uninsured losses, which could also be substantial. Hurricane Helene, which struck last month, likely incurred more uninsured losses than insured losses due to severe flooding and a lack of flood insurance coverage in certain severely affected regions.
The close succession of Milton following Helene may further complicate the situation. Fitch highlights that the ultimate extent of losses will be influenced by heightened demand and limited availability of labor and materials in the aftermath of multiple large-scale disasters. This factor could potentially elevate insured losses by over 20%.
Projections suggest that Hurricane Milton's impact could push insured losses beyond $100 billion in 2024, marking the fifth consecutive year that insurers have faced such significant financial burdens. Despite this, Fitch reassures that the credit ratings of property/casualty insurers and global insurers are unlikely to be severely impacted, as they maintain robust capital reserves.
However, Fitch raises concerns regarding Florida property insurance specialists, noting their vulnerability if the losses incurred by Hurricane Milton exceed reinsurance limits. The precarious state of the Florida homeowners' insurance market is expected to deteriorate further due to the widespread destruction caused by Milton.
