Evaluation undertaken by specialist investment manager Twelve Capital suggests an insurance industry loss within the range of $20 billion to $50 billion from hurricane Milton, with a 0% to 4% principal loss possible for the catastrophe bond market.

The evaluation closely matches with information now we have been publishing, so provides one other data-point that means the sub-$50 billion insurance and reinsurance market loss is increasingly looking likely.

But Twelve Capital also notes the potential for significant uninsured losses with hurricane Milton, in addition to certain areas of potential catastrophe bond pressure.

The investment manager said, “Evaluation from Twelve Capital, and initial market estimates, peg industry losses within the USD 20 – 50bn range, with potential for material uninsured losses.

“One area of uncertainty on this can be the losses to the US National Flood Insurance Program (NFIP) sponsored Cat Bonds, that are already under pressure on the back on Hurricane Helene which was a heavy rainfall event.”

Uncertainty over the NFIP FloodSmart Re catastrophe bonds is prone to persist for some time, because the FEMA Program’s flood insurance claims can take time to are available and be counted.

Twelve Capital went on to say, “Current evaluation estimates there to be a 0% – 4% principal loss to the Cat Bond Market.”

Then, highlighting some specific areas of uncertainty, the investment manager explained, “In the approaching weeks there’s prone to be price fluctuation, especially on bonds heavily exposed to the Tampa Region and with coastal policies.

“We’re monitoring the NFIP bonds that cover hurricane induced flooding, nevertheless it is simply too early to inform the precise impact, but Tampa is a key exposure zone for the NFIP.”

Finally, Twelve Capital also commented on how the catastrophe bond market might behave over the approaching weeks, because the impacts and any losses from hurricane Milton are digested.

“There’s also the potential to see spread widening across many Cat Bonds as prior to Milton, the market had priced in rate softening for the upcoming renewals, which is now less certain given the pressure Milton may apply to the reinsurance market,” Twelve Capital reported.

So, because the week Milton made landfall draws to an in depth, the industry impacts are still regarded as sub-$50 billion (a few of our sources are still suggesting $20bn to $40bn as a possible tighter range to look towards), while the catastrophe bond market impact is anticipated to be relatively small (within the scope of the market). Greater clarity may emerge next week.

Also read:

– Cat bond market drawdown expected, yields prone to rise after Milton: Elementum’s Davis.
– Hurricane Milton loss $30bn – $50bn. Substantial ILS impact not expected: Euler ILS Partners.
– Mutual cat bond and ILS funds recuperate ground as hurricane Milton impact clearer.
– Milton loss below $50bn is probably not sufficient to maneuver pricing: Jefferies.
– Milton could drive property catastrophe reinsurance rates up at 1/1 2025: KBW.
– Most mutual cat bond & ILS funds slid a bit of further on Milton’s final approach.
– Cat bond funds can still finish the 12 months positively: Twelve Capital’s Wrosch.
– Hurricane Milton losses likely below a 5% cat bond market impact: Icosa Investments.
– Hurricane Milton: Pre-landfall broker loss estimates ranged $15bn to $40bn.
– Hurricane Milton Cat 3 landfall in Sarasota. Worst case Tampa loss scenarios avoided.
– Hurricane Milton: Insurance, reinsurance, cat bonds, ILS able to respond.
– Some mutual cat bond and ILS fund NAVs fall further on hurricane Milton threat.
– Hurricane Milton industry loss at $25bn+ changes pricing narrative: Goldman Sachs.
– Hurricane Milton cat bond loss potential still in wide selection: Icosa Investments.
– Hurricane Milton seen denting cat bond market -1.4% (excl. surge): Plenum.
– 33% probability hurricane Milton loss above $50bn. Would drive hard market: Euler ILS Partners.
– Hurricane Milton Cat 5 again. Tracks barely south. Uncertainty still high, loss range wide.
– Protected to say hurricane Milton likely a $20bn+ insurance market event: Siffert, BMS.
– Hurricane wind speeds forecast across entire Florida Peninsula as Milton approaches.
– Mexico’s catastrophe bond presumed protected from hurricane Milton.
– Stone Ridge leads managers cutting mutual cat bond or ILS fund NAVs on hurricane Milton.
– Hurricane Milton could possibly be an enormous test for your entire (re)insurance market: Evercore ISI.
– Hurricane Milton losses could amount to tens of billions, but uncertainty high: BMS’ Siffert.
– As hurricane Milton intensifies, Mexico’s catastrophe bond comes into focus.
– Material hurricane Milton losses could change 2025 property reinsurance price trajectory: KBW.
– Cat bond & ILS managers explore options to free money, as hurricane Milton approaches.
– Hurricane Milton: First Tampa Bay storm surge indications 8 to 12 feet.
– Hurricane Milton is biggest potential ILS market threat since Ian in 2022: Steiger, Icosa.
– Hurricane Milton forecast for costly Florida landfall. Cat bond & ILS market on watch.