• Investing
  • Stock
  • Editor’s Pick
  • Economy
The Significant Deals
Stock

Hurricane Milton could cost insurers $60 billion, raise reinsurance rates, RBC says

by October 9, 2024
written by October 9, 2024

LONDON (Reuters) – Hurricane Milton could result in a $60 billion loss for the global insurance industry, creating a surge in 2025 reinsurance prices which could boost some insurance companies’ shares, analysts at RBC Capital said. The Category 5 hurricane is due to make landfall on the Gulf Coast of Florida late on Wednesday or early Thursday, and is potentially one of the most destructive ever to hit the region, which is still recovering from devastation caused by Hurricane Helene less than two weeks ago.

More than one million people in coastal areas are under evacuation orders.

A $60 billion loss would be similar to losses from Hurricane Ian, which hit Florida in 2022, the RBC analysts said on Wednesday, adding that this estimate for Milton should be “very manageable” for the insurance sector.

“Market seems to be pricing in a similar impact from Hurricane Ian of a $60bn industry loss in 2022,” RBC analysts said.

Ian was the second largest insured loss from a hurricane, following Hurricane Katrina in 2005, according to the Swiss Re (OTC:SSREY) Institute, which provides research on insurance.

Insurers and reinsurers – who insure the insurers – have responded to rising losses from natural catastrophes in the past few years by raising rates and excluding higher-risk business.

“Better reinsurance contract terms, broader earnings diversification and bigger reserve buffers should put the sector in better stead than before,” the RBC analysts said in a note.

Barclays analysts this week estimated insured losses from the hurricane could exceed $50 billion.

Shares in global reinsurers Swiss Re and Munich Re and in Lloyd’s of London players Beazley, Hiscox and Lancashire have fallen this week. Swiss Re, Munich Re and Beazley have been trading at record highs on the back of strong profits.

“It’s only a matter of time before shares regain lost ground as prospects of harder pricing at the subsequent (policy) renewals set in,” RBC added.

Reinsurers fix prices for many insurance contracts on Jan 1.

Analysts at Peel Hunt said on Wednesday that a major hurricane making landfall across Tampa Bay and travelling west across the Florida Peninsula would be similar to a realistic disaster scenario set out by Lloyd’s earlier this year, which projected a $134 billion loss for the insurance sector.

Lloyd’s maintains a set of mandatory Realistic Disaster Scenarios to stress test both individual syndicates and the market as a whole. The event scenarios are regularly reviewed to ensure they represent material catastrophe risks.

This post appeared first on investing.com
0 comment
0
FacebookTwitterPinterestEmail

previous post
Honda to recall about 1.7 million US vehicles over steering gearbox concern
next post
Morning Bid: Braced for Milton as oil recoils, China retreats

You may also like

BASF results down on impairments, restructuring

January 27, 2025

European chipmakers slump as traders gauge DeepSeek AI...

January 27, 2025

Nasdaq futures tumble as China’s AI push rattles...

January 27, 2025

China Vanke’s CEO, chairman resign amid growing liquidity...

January 27, 2025

Fuji Media, rocked by sexual misconduct allegations, says...

January 27, 2025

Italy’s MPS shares fall ahead of Mediobanca board...

January 27, 2025

British Land stock drops following stake sale

January 27, 2025

UMG shares rally after new multi-year pact with...

January 27, 2025

BASF shares indicated 3% lower as impairments drag...

January 27, 2025

Ryanair cuts 2026 traffic forecast amid ongoing Boeing...

January 27, 2025
Fill Out & Get More Relevant News








    Stay ahead of the market and unlock exclusive trading insights & timely news. We value your privacy - your information is secure, and you can unsubscribe anytime. Gain an edge with hand-picked trading opportunities, stay informed with market-moving updates, and learn from expert tips & strategies.

    Recent Posts

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks

      June 26, 2025
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

      June 26, 2025
    • Bumble shares jump 26% as dating company plans to axe 30% of workforce

      June 26, 2025
    • Small-business AI use is lagging, but one firm is channeling Sherlock Holmes and knocking out ‘grunt work’

      June 25, 2025

    Categories

    • Economy (245)
    • Editor's Pick (3,646)
    • Investing (534)
    • Stock (6,426)

    Latest News

    • Divided Fed proposes rule to ease capital requirements for big Wall Street banks
    • Women’s Tennis Association extends media rights deal with Tennis Channel through 2032

    Popular News

    • Asia stocks cautious after mixed China data; dollar firm on Fed view
    • No-frills carrier Frontier reports bigger-than-expected Q3 loss, shares fall

    About The Significant deals

    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 thesignificantdeals.com | All Rights Reserved

    The Significant Deals
    • Investing
    • Stock
    • Editor’s Pick
    • Economy