Hurricane Milton has crossed Florida’s west coast at category 3 intensity, bringing storm surges, damaging winds, flooding and tornadoes, and putting pressure on insurers. 

Milton is the third hurricane to hit the state this season, with parts of Florida still recovering from Hurricane Helene, which swept ashore in the less populated Big Bend region two weeks ago before causing torrential rain and inland flooding across southeast states. 

S&P Global Ratings says it is reviewing insured loss scenarios and the potential impact on US primary insurers and global reinsurers, with the scale of damage from Milton uncertain. 

“For reference, Hurricane Ian, which made landfall as a category 4 hurricane in Florida in 2022, resulted in industry-insured losses of about $US60 billion ($89 billion),” it said in a report.   

Hurricane Milton reintensified to category 5 strength this week before easing as it approached the US coast. It made landfall near Siesta Key, south of Tampa, about 8.30pm on Wednesday (local time) with maximum sustained winds of 205km/h. 

The National Hurricane Centre said damaging and life-threatening hurricane-force winds would spread across parts of the central Florida peninsula to the east coast overnight and early on Thursday. Heavy rainfall would bring the risk of catastrophic and life-threatening flash and urban flooding, along with moderate to major river flooding, especially in areas where coastal and inland flooding combined to increase the threat, it warned. 

S&P says Citizens Property, Florida’s statutory insurer of last resort, will absorb a higher proportion of the losses relative to other insurers in the state. 

“For our rated portfolio of US property and casualty insurers, potential losses from Hurricane Milton could fully deplete their 2024 natural catastrophe budgets, affecting underwriting margins and earnings,” it said in the report issued before the hurricane’s landfall. “However, we expect capitalisation will remain stable.” 

Milton is also poised to be a significant event for global reinsurance this year, S&P says, but it does not see the hurricane topping the sector’s annual catastrophe budgets. 

Moody’s RMS Event Response earlier this week estimated private market insured losses from Helene at $US8-$US14 billion ($11.9-$20.8 billion), with a “best estimate” of $US11 billion ($16.4 billion). 

The estimate is driven by wind losses, with a higher contribution coming from Georgia than Florida, while storm surge in Florida and North Carolina floods will add to the total. 

Helene made landfall as a category 4 hurricane, but the worst impacts were recorded inland, where flood cover levels are low 

Moody’s RMS Event Response also estimates losses to the National Flood Insurance Program (NFIP) from Helene could reach at least $US2 billion ($3 billion). 

AM Best says Milton poses a severe challenge for Florida property insurers and reinsurers. 

“Florida-only property insurers and Florida-concentrated insurers are acutely susceptible to significant events, and the back-to-back punches from hurricanes Helene and Milton could prove too devastating for some of them,” it said in a report. 

AM Best says losses from Hurricane Helene, coupled with the potential damage due to Milton, could breach the reinsurance program towers the Federal Emergency Management Agency secured for the NFIP, along with coverage from in-force catastrophe bonds. 

“The upcoming January 1 renewals for property reinsurance programs could be more problematic for primary insurers because of the effects of the ... hurricanes,” it said.