Hurricanes Helene, Milton Insurance Losses Spike To $55B: Moody's

Insured losses are way higher than originally anticipated due to the havoc from back-to-back hurricanes.

What Happened: Moody’s Risk Management Solutions, or RMS, crunched the data to determine the financial impact of Hurricanes Milton and Helene.

The firm expects total insured losses to range between $35 billion and $55 billion.

That’s nearly quadruple what Moody's originally estimated, with losses falling between $8 billion and $14 billion.

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Hurricane Milton, the 13th named storm of the season, closely followed Hurricane Helene, which made landfall just two weeks earlier in Florida’s Big Bend region along the Gulf of Mexico.

Both storms hit many of the same areas, bringing widespread wind damage, storm surges, and inland flooding.

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Why It Matters: Moody’s estimates help insurance companies, policymakers and other stakeholders assess the financial risks and prepare for the economic consequences of such events in the future.

And that’s important considering hurricane season typically runs until Nov. 30.

But here’s the thing: Floridians already pay exorbitant homeowners’ insurance premiums, per Orlando Weekly. With the immense damage caused by these storms, they’re going to be paying even more.

According to Moody’s Chief Risk Modeling Officer Mohsen Rahnama, several factors add uncertainty to the final loss estimates. These include the complexity of hazard patterns, such as the damaging tornadoes spawned by Milton's rainbands in southern Florida, and the storm's interaction with a mid-latitude jet, which created two swaths of the strongest winds.

In some cases, structures already damaged by Helene may have sustained further damage from Milton. This complicates efforts to determine the primary cause of loss and leads to potential coverage issues.

It’s not just Helene and Milton. Overlapping insurance claims and Florida's annual deductibles may increase losses for properties previously damaged by past hurricanes, such as Ian in 2022.

Altogether, the Moody’s ground teams conducted “field reconnaissance” for more than 2,000 miles of damage.

“Our teams are still in Florida surveying the impacted areas,” Rahnama said.

Florida’s Insurance Problem: Several major insurance companies had already retreated from Florida due to the high risks associated with the state’s frequent hurricanes and rising litigation costs. The ones that remained include:

• Allstate Corp ALL
• Travelers Companies Inc TRV
• Progressive Corp PGR
• State Farm

Florida-only carriers will take the hardest hit, per a Moody’s report from Oct. 10. These insurance companies have at least 75% of their homeowners and commercial property premiums written in the state, the firm noted.

“The top 10 Florida-only insurers write about 50% of the state’s homeowners business and are more vulnerable than others given their geographic concentration,” the company stated. They include:

• Citizens Property Insurance Corp.
• Universal P&C
• Tower Hill
• First Protective
• Slide Insurance
• Edison Insurance
• Amer Integrity
• Florida Peninsula
• Homeowners Choice P&C
• Security First

ETFs To Watch: Three exchange-traded funds tracking public companies in the insurance space were all in the green at last check Monday:

• SPDR S&P Insurance ETF KIE, up 0.78%
• iShares U.S. Insurance ETF IAK, up 0.37%
• Invesco KBW Property & Casualty Insurance ETF KBWP, up 0.58%

What’s Next: Moody's will provide a final industry loss estimate for Milton by the end of this week.

The National Hurricane Center is tracking a tropical depression in the Atlantic Ocean.

Though it can bring heavy rain and cause flooding, a tropical depression is generally weak; if wind speeds increase beyond 39 miles per hour, it can develop into a tropical storm or hurricane if conditions allow.

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