Hurricane Milton will push global industry insured losses thus far in 2024 to over $100bn, which is the fifth consecutive year losses have crossed this threshold, Fitch Ratings has forecast.
This heightened level of catastrophe losses will likely limit any potential for rate declines in property catastrophe business in 2025 as (re)insurers maintain underwriting discipline, according to Fitch.The property market could see a hardening of premium rates, depending on the ultimate Milton losses and the amount of additional catastrophe losses for the remainder of 2024. However, the sizable property reinsurance price increases experienced in 2023 are unlikely given the more adequate current pricing environment.
Hurricane Milton is not likely to affect credit for rated property & casualty (PC) insurers and global reinsurers given very strong capital levels, Fitch said.
Milton could cause up to $50bn in insured losses for Florida property owners, pushing insurers' estimated losses in the state over $100bn in 2024 alone, Fitch said.
The agency added, “We estimate Milton’s insured losses will range from $30bn-$50bn, the largest insured loss since Hurricane Ian (a strong Category 4) ravaged a similar path in 2022 and caused $60bn of losses. Milton will be a 4Q and 2024 earnings event for large rated insurers with Florida exposure. The insurance losses will hit reinsurance attachment points, shifting a meaningful amount of losses to the reinsurance market, particularly from the Florida specialist companies with lower retentions.”
Fitch said that ultimate losses will also depend on demand surge, as Milton followed closely on the heels of Hurricane Helene, a Category 4 that devastated the southeastern US two weeks earlier. Higher demand and limited supply of labor and materials needed to adjust claims and repair/rebuild following multiple large-scale disasters can increase insured losses by 20% or more.
Source: asiainsurancereview.com
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