While industry losses from hurricane Milton is probably not as high as had initially been feared, the storm’s impacts in Florida are still expected to be a loss within the tens of billions of dollars, and alongside loss experience within the sector to-date this will still drive property catastrophe reinsurance rates higher on the January renewals, KBW has said.

Citing Gallagher Re’s pre-landfall estimate for between $30 billion and $40 billion of industry losses from hurricane Milton, KBW’s analyst team note that, “The hurricane’s relatively rapid weakening and its landfall location (not a direct hit to Tampa) suggest insured losses closer to the lower than the upper end,” of that range.

They further explain that it’s “too early to pinpoint a loss estimate.”

Adding, “We expect Milton’s losses to drive property catastrophe reinsurance rates up y/y through the January 1, 2025 renewals, but lowered reinsured losses imply lower pricing increases.”

So the analysts are suggesting Milton could also be a sufficiently large industry loss to halt any softening of property catastrophe reinsurance, perhaps leading to some increases at January 1 2025 renewal contract signings.

First-half 2024 global insurance industry catastrophe losses were estimated at between $60 billion and $66 billion by a lot of the firm’s we track.

The third-quarter is more likely to see around $30 billion added to that total, with the possible double-digit hurricane Helene more likely to be the most important single event of that quarter.

Now, hurricane Milton in early Q4, could add an additional $30 billion plus in losses to the overall, which might take industry catastrophe losses for the yr to somewhere across the $120 billion or higher level, it now seems.

That’s one other expensive yr of weather and natural catastrophe losses for the industry and the actual fact two relatively meaningful loss events have occurred in Florida, while five land-falling US hurricanes have been seen, this might all be sufficient to extend reinsurance capital providers desire to make sure they’re adequately compensated for the danger they assume.

After the recent Monte Carlo Rendez-Vous industry event, which was before hurricane’s Helene and Milton, the expectation was set that property catatsrophe reinsurance rates would likely decline within the mid-single digits.

Now that seems less likely, analysts suggest. Remember Goldman Sachs analysts had also said a hurricane Milton insurance industry lack of above $25 billion can be sufficient to alter the pricing narrative for property catastrophe risks at the tip of yr reinsurance renewals.

Also read:

– Most mutual cat bond & ILS funds slid somewhat further on Milton’s final approach.

– Cat bond funds can still finish the yr 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 big 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.

– Secure 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 secure from hurricane Milton.

– Stone Ridge leads managers cutting mutual cat bond or ILS fund NAVs on hurricane Milton.

– Hurricane Milton may very well 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.