Milton could hit insurers earnings, but capital likely secure: S&P

Potential losses from Hurricane Milton could exhaust 2024 natural catastrophe budgets for U.S. property/casualty insurers, hitting underwriting margins and earnings, but not capitalization, according to a report Wednesday from S&P Global Ratings.

Global reinsurers also face substantial potential exposure to potential losses from Milton, but losses should stay within their catastrophe budgets, S&P said.

Milton, currently a Category 4 major hurricane, is expected to make landfall around the Tampa Bay region later Wednesday and move off the east coast of Florida over the western Atlantic Ocean on Thursday.

While the scale of damage from Milton remains highly uncertain, it could be substantial, potentially matching that of Hurricane Ian in 2022, which resulted in about $60 billion in insured losses, S&P said.

“The key question is whether potential losses will stay within reinsurers’ annual natural catastrophe budgets or annual earnings, or whether they will escalate and become a capital event,” S&P said.

The impact of Milton, combined with natural catastrophe losses incurred so far in 2024, could still fall within reinsurers’ catastrophe budgets, the ratings agency said.

About 235,000 commercial properties with an estimated value of $1.1 trillion are in the direct path of Hurricane Milton, credit ratings agency Moody’s said in an analysis issued Wednesday.

Major metropolitan areas in Milton’s direct path with commercial property values in the billions of dollars include Tampa, with $94.6 billion; Saint Petersburg, with $48.3 billion; and Sarasota, with $26.7 billion. Commercial properties in Orlando in Milton’s path have an estimated value of $109.7 billion.

Moody’s said 235,388 commercial properties in Florida have a greater than 50% probability of being exposed to wind speeds of at least 50 miles per hour – the speed at which some damage is likely.

Apartment buildings in the direct path of Milton have the highest estimated value at $370.6 billion, followed by retail buildings at $276.2 billion, office at 168.2 billion, industrial at $155.2 billion and hotels at $108.9 billion.

A total of 78,916 retail, 64,857 apartment buildings, 44,122 industrial, 42,387 office, and 5,056 hotels are potentially exposed, based on Moody’s analysis.

Estimates of total property value and potential damage are limited to the properties covered in Moody’s commercial real estate database and include wind exposure only.