Milton’s 152,180 Claims So Far to Mean New Pressure on Reinsurance, Rate Hikes
Property Insurance claims from Hurricane Milton had topped more than 152,180 by Monday, with some $1.9 billion in estimated insured losses. That’s already more than the claims and losses reported for Helene, which made landfall in Florida two weeks earlier, the Florida Office of Insurance Regulation posted.
The losses, while less than some had feared, will likely trigger a spike in reinsurance prices and another wave of property insurance rate increases, just as Florida regulators have touted rate stabilization in the state, industry veterans said.
“If the reinsurers are looking to increase their pricing, then that hits us and, in turn, we would look to increase our rates to cover those costs,” said Jim Santo, co-founder and CEO of St. Petersburg-based Loggerhead Reciprocal Interinsurance Exchange.
Loggerhead now holds more than 50,000 policies in force as it continues to take on thousands of policies once held by Progressive insurance companies in Florida.
“This will also be a significant event for reinsurers,” said longtime Florida insurance attorney Fred Karlinsky, chair of the Greenberg Traurig law firm’s insurance regulatory practice group. “I think they will have a tough year based on this loss, but I don’t think it will change their appetite. However, it might change their spread of risk moving forward.”
Karlinsky noted that Florida’s insurance industry, which saw 10 insurers become insolvent in 2021 and 2022, is better positioned to handle the losses from Milton than it was two and three years ago, thanks in part to legislative changes that disincentivized excess claims litigation.
Other analysts agreed that even if the remainder of the 2024 Atlantic hurricane season is quiet, Milton and Helene will spur reinsurance price hikes. The storm damage will reverse the signs of price stabilization observed during the 2024 mid-year reinsurance renewal season, said Steve Liu, assistant vice president of global insurance and pension ratings at Morningstar DBRS, a financial rating firm.
Insurers also have reported more than 21,100 private passenger auto claims from Milton, but only about 400 commercial auto claims. Commercial residential properties, including cost-beset condominiums, reported 668 claims through Sunday. Totals will rise as carriers report numbers to the OIR.
In total, private insured losses from Category 3 Milton are expected to reach $36 billion, said the disaster modeling firm Karen Clark & Co., compared to the $63 billion KCC estimated for Hurricane Ian in 2022, which left damage in other Southeastern states.
Moody’s RMS said private insured losses from Milton and Helene together will be between $35 billion and $55 billion.
Top photo: Heavy damage in Bradenton, Florida, near Cortez Bridge (Photo by Matt Mercier, a licensed drone pilot and national director of community associations for insurance advisor CBIZ.)