Hurricane Milton could cost $60bn in insurance losses

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Hurricane Milton could trigger insurance losses of up to $60bn if it stays on its current path, with analysts warning the US’s 2024 hurricane season will “dent” insurers’ profitability.

The National Hurricane Center forecasts the storm, which is heading towards Florida, will make landfall south of the city of Tampa as “an extremely dangerous major hurricane” on Wednesday night. It is currently a category 3 storm, with winds of up to 120mph. The NHC warned of “life-threatening” gusts, tornadoes and storm surges of 10 feet or higher.

Credit rating agency Morningstar DBRS estimated that a change of course leading to a direct hit on Tampa could trigger losses of up to $100bn, which would be on a par with those of Hurricane Katrina, and would make it one of the costliest natural disasters in US history.

The head of the US Federal Emergency Management Agency, Deanne Criswell, on Wednesday said Milton would be a “deadly and catastrophic storm” bringing “massive storm surge, high winds and severe flooding” to Florida.

Milton is the second major hurricane to hit the US in a fortnight. It comes after Hurricane Helene wreaked havoc across several south-eastern states, killing more than 225 people and destroying roads across western North Carolina.

Morningstar warned accumulation of losses over the 2024 hurricane season, which runs until the end of November, would “likely make a dent in insurers’ profitability”, particularly for those with “significant exposures to personal lines in Florida”.

While south-east Florida has long been seen as a high-risk area for hurricanes, insurers considered the northern part of the state as a more attractive place to write policies, said Oscar Seikaly, chief executive of NSI Insurance, a Miami-based group.

“Insurers have been balancing their business by writing lots of policies up north, which historically was pretty safe — until recently,” he said.

Seikaly added the potential damage in the area, where many houses are not built to withstand major storm events, could be severe. “There are still frame houses and those are the ones that fly if you have a tropical storm,” he said.

He predicted that after this year’s hurricane season “policies will absolutely go up by at least 20 per cent”.

The Securities and Exchange Commission, the US financial regulator, on Wednesday said it was “closely monitoring” the impact of Hurricane Milton on investors and capital markets, and would consider offering relief from filing deadlines for those affected by the storm.

Florida governor Ron DeSantis said 6,000 members of the Florida National Guard and 3,000 from other states were standing ready to respond to the aftermath of the hurricane.

“This is the largest Florida National Guard search and rescue mobilisation in the entire history of the state of Florida,” he told reporters on Wednesday.

DeSantis also tried to reassure Florida residents about the availability of fuel, following reports that some petrol stations had run dry because of panic buying. Highway patrol cars were escorting tankers through traffic to replenish supplies at petrol stations, he said.

President Joe Biden on Wednesday criticised Republican presidential candidate Donald Trump for leading an “onslaught of lies” about the US government’s response to the storm.

Trump has sought to politicise both Hurricane Helene and Hurricane Milton by accusing the Biden administration of not doing enough to help communities hit by the storms. He has also spread false information about the amount of financial aid available to people fleeing disaster areas.

“For the last few weeks, there’s been a reckless, irresponsible and relentless promotion of disinformation and outright lies that are disturbing people,” said Biden. “It’s undermining confidence in the incredible rescue and recovery work that has already been taken and will continue to be taken. It’s harmful to those who need help the most.”

Biden also attacked a social media post by the Republican congresswoman from Georgia, Marjorie Taylor Greene, that suggested the government controlled the weather.

“It’s beyond ridiculous,” he said. “It’s got to stop”.

In the Tampa Bay area, officials were sending text messages and calling people to warn them of the dangers of failing to evacuate their homes. In Pinellas County, which sits on the peninsula that forms Tampa Bay, officials warned people to “get out now”.

Emergency management director Cathie Perkins said 13 public shelters were open for people with no other options to escape the hurricane, and warned that bridges across to Tampa were closing. “Everybody in Tampa Bay should assume we are going to be ground zero,” she said.

Meanwhile, an independent group of climate scientists said human-caused climate change had boosted Hurricane Helene’s devastating rainfall by about 10 per cent and intensified its winds by about 11 per cent.

Global warming from the burning of fossil fuels had made the high sea temperatures that fuelled the storm 200 to 500 times more likely, the World Weather Attribution group found in a new report.