BMO warns of potential $75bn+ in insured losses if Milton strikes Tampa as a major hurricane

A new report from BMO Capital Markets discussing Hurricane Milton’s potential impact has noted that a direct hit on Tampa at a Category 3-5 level could result in insured losses exceeding $75 billion.

For those unaware, Milton is currently a powerful category 4 hurricane, with maximum sustained winds near 155 mph.

Despite expected fluctuations, it is forecast to remain extremely dangerous through to landfall in Florida on Wednesday night, as per the most recent update from the National Hurricane Center.

While loss estimates are highly uncertain at this stage, BMO has revealed that the stock market is implying Milton could result in up to ~$70-80 billion of insured losses.

BMS Group’s Andrew Siffert recently stressed that a landfall around Tampa will be a major event for the re/insurance industry.

At the same time, analysts at KBW have suggested that possible reinsured losses from the event could drive property catastrophe reinsurance rates up at the January 1, 2025 renewals.

BMO’s report additionally highlighted the passing of “meaningful reforms” in Florida that should materially lower claims levels vs. historical ’22 and prior industry experience.

“For example, if Hurricane Ian were to take place today, we estimate losses would be lower under current reforms. This is an unknown that could prove to be an incremental benefit to the insurance industry,” BMO said.

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