Hurricane Milton Batters Florida; Likely to Boost Already-High Insurance Prices

Morningstar DBRS published a commentary discussing Hurricane Milton's potential financial implications for the U.S. property insurers and related global reinsurers.

Key highlights include the following:
-- We expect insured losses to be in the upper half of our initial estimated range of $30 billion to $60 billion.
-- Citizens Property Insurance Corporation, Florida's public insurer of last resort and the largest residential property insurer, will maintain its financial strength, while some smaller and mid-size local insurers may face significant earnings pressure.
-- Considering the significant hurricane-related losses, reinsurance prices are likely to increase, reversing the signs of price stabilization observed during the 2024 mid-year renewal season.

"Hurricane Milton will likely remain an earnings event for global reinsurers, under the assumption that the remainder of the Atlantic hurricane season remains relatively quiet," said Steve Liu, Assistant Vice President of Global Insurance & Pension Ratings at Morningstar DBRS. "However, after two back-to-back hurricanes that occurred in Florida within two weeks of each other, stabilization in reinsurance prices during the mid-year renewals is likely to reverse with reinsurance prices expected to continue their upward trajectory."