Hurricane Milton could cost insurers up to $100 bln, analysts say
Repeats with no change to text
Milton loss could reach $100 bln, matching Katrina
Possible loss of $60 bln would be similar to Ian
Reinsurance rates could increase and boost shares
By Carolyn Cohn and Noor Zainab Hussain
LONDON, Oct 9 (Reuters) -Hurricane Milton could result in losses of up $100 billion for the global insurance industry, creating a surge in 2025 reinsurance prices that could boost some insurance companies' shares, analysts said on Wednesday.
The Category 5 hurricane is expected to make landfall on the Gulf Coast of Florida late on Wednesday or early Thursday. It is potentially one of the most destructive yet to hit the region, which is recovering from devastation caused by Hurricane Helene less than two weeks ago.
Insured losses from Milton could be from $60-$100 billion if the hurricane makes direct landfall in the densely populated area of Tampa, analysts at Morningstar DBRS said.
A loss of $100 billion would put Milton on a par with Katrina in 2005, they added, saying that insured losses would likely be "substantial but not catastrophic".
Katrina caused the largest insured loss from a hurricane.
The second largest loss came from Ian, which hit Florida in 2022 and led to losses of around $60 billion.
RBC analysts estimated Milton would lead to similar losses to Ian that should be "very manageable" for the insurance sector.
Analysts at Jefferies estimated a mid-double-digit billion dollar insured loss would follow a major hurricane impact in one of Florida's most heavily populated regions.
"A 1-in-100 year event is estimated by some to result in $175 billion in losses for landfall in the Tampa region, and $70 billion in losses in the Ft Myers region," they wrote in a note
INDUSTRY RESPONSE
Insurers and reinsurers - who insure the insurers - have responded to rising losses from natural catastrophes, which scientists say are being exacerbated by climate change, by raising rates and excluding higher-risk business.
"Better reinsurance contract terms, broader earnings diversification and bigger reserve buffers should put the sector in better stead than before," the RBC analysts said in a note.
Shares in global reinsurers Swiss Re SRENH.S and Munich Re MUVGn.DE and in Lloyd's of London SOLYD.UL players Beazley BEZG.L, Hiscox HSX.L and Lancashire LRE.L have fallen this week. Swiss Re, Munich Re and Beazley have been trading at record highs in recent weeks following strong profits.
"It's only a matter of time before shares regain lost ground as prospects of harder pricing at the subsequent (policy) renewals set in," RBC added.
Reinsurers fix prices for many insurance contracts on Jan. 1.
Analysts at Peel Hunt said on Wednesday that a major hurricane making landfall across Tampa Bay and travelling west across the Florida Peninsula would be similar to a realistic disaster scenario set out by Lloyd's earlier this year, which projected a $134 billion loss for the insurance sector.
Lloyd’s maintains a set of mandatory Realistic Disaster Scenarios to stress test both individual syndicates and the market as a whole. The event scenarios are regularly reviewed to ensure they represent material catastrophe risks.
Reporting by Carolyn Cohn and Noor Zainab Hussain, editing by Sinead Cruise, Jane Merriman, Chizu Nomiyama and Barbara Lewis
Activos relacionados
Últimas noticias
Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.
Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.
Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.
