Moody’s warns that Milton losses will be costly
As the clean-up from Hurricane Milton continues across Florida, rating agency Moody’s has warned that insured losses from the damage inflicted by the hurricane will be costly.
In its latest report on the event, Moody’s warned that: “Although it will take weeks or months for insurers to have reliable estimates of insured losses, the storm's large footprint and path across central Florida indicate that Hurricane Milton will be another costly US hurricane. We expect insured losses from the storm to affect both primary insurers and the reinsurance sector, with the proportion of losses ceded to reinsurers increasing as the magnitude of losses increases.”
Moody’s pointed out that:
- P&C insurers will incur losses from various hurricane-related perils, including direct wind damage, roof leaks, damage from fallen trees, additional living expense claims and business interruption. The flooding will also cause losses for personal and commercial auto insurers; flood-related auto claims are almost always total losses. The claims handling process will be complicated because Hurricane Milton occurred in close succession to Hurricane Helene.
- Insurers most exposed to the storm are Florida-only carriers, which we define as insurance companies with at least 75% of their homeowners and commercial property premiums written in the state.
- Reinsurers will incur losses from Milton, and this hurricane season's losses will determine pricing direction in 2025.
- Citizens and the Florida Hurricane Catastrophe Fund could bear significant losses.
- Large national homeowners insurers have considerable resources to withstand a significant event based on careful monitoring of their coastal exposures, strong geographic diversification, high-quality reinsurance protection and strong capital bases.
- Commercial property insurers expect property damage, flood and business interruption claims.
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