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

TAMPA — 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 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.