Moody’s RMS Event Response has estimated that total private insurance industry losses from hurricane Milton will fall between $22 billion and $36 billion, as the firm trims its combined Helene and Milton insured loss range to $30 billion to $50 billion.
For just hurricane Milton, the fifth hurricane to make landfall in the U.S. this season, Moody’s RMS has released a insured loss best estimate of $26 billion, which reflects insured losses from wind, storm surge, and precipitation-induced flooding from the event.
Insured wind losses, including coverage leakage and storm surge but excluding losses to the National Flood Insurance Program (NFIP), for Milton have been estimated at $21 billion to $34 billion by Moody’s RMS, with insured losses from inland flooding, excluding NFIP losses, pegged at $1 billion to $2 billion.
The company’s Helene loss estimate remains unchanged at between $8 billion and $14 billion, of which $7 billion to $12 billion relates to wind and $1 billion to $2 billion to inland flood. These Helene estimates also exclude losses to the NFIP.
So, for both storms, the cat risk modeller expects insured wind losses of between $28 billion and $46 billion, inland flood losses of $2 billion to $4 billion, resulting in a total combined insured loss range of $30 billion to $50 billion, with a best estimate of $37 billion.
Regarding the NFIP, Moody’s RMS estimates that losses from both events could exceed $5 billion for the entity.
Moody’s RMS expects losses for the NFIP to be largely driven by storm surge, particularly in areas south of Tampa Bay-St. Petersburg. Insured wind and NFIP losses will be driven by residential lines, while storm surge and inland flood losses to the private market will be driven by commercial, and automobile lines.
The estimated losses for Milton reflect property damage and business interruption to residential, commercial, industrial, watercraft, and automobile lines of business, and also considers sources of post-event loss amplification due to the compounding impacts of both Milton and Helene and non-modeled losses from extended power outages, as well as losses associated with tornadoes.
Mohsen Rahnama, Chief Risk Modeling Officer, Moody’s, commented: “We were fortunate to avoid the ‘grey swan’ event that many feared when Milton tracked and made landfall south of the Tampa-St. Petersburg metro area. Still, the storm’s large swath of damaging winds, subsequent storm surge, and inland flood footprints affected key exposure areas throughout the state, which will undoubtedly make it one of the costliest hurricanes to impact west Florida.”
Raj Vojjala, Managing Director, Modeling and Analytics, Moody’s, said: “It’s important to not just consider the overlap across areas affected by high winds and surge in Milton and Helene, but also areas that sustained damage during Hurricane Ian in 2022 that haven’t fully recovered yet.
“Our vulnerability experts on the ground surveyed these impacts firsthand, which was invaluable in discerning the loss potential from Milton. Field reconnaissance confirmed numerous instances of improved resilience of structures that had their roofs replaced recently. It also highlighted areas with older building stock and roofs in parts of Tampa Bay that had not experienced such high winds in recent times, which will likely drive notable wind claims in Milton, especially if they are subject to the Florida 25 percent roof replacement rule.”
Jeff Waters, Director – North Atlantic Hurricane Models, Moody’s, added: “Alongside damaging wind, storm surge, and precipitation-induced inland flooding, the outer rainbands of Hurricane Milton also produced numerous damaging tornadoes across Florida.
Damage surveys by the National Weather Service are still being conducted, but even the confirmed data to date suggests that Milton produced one of the most prolific tornado outbreaks associated with a tropical cyclone in recent history. Moody’s RMS Event Response used insights from our own in-person reconnaissance and remote sensing data to analyze these tornado tracks and associated wind speeds. This data is incorporated into our wind reconstructions and overall industry loss estimate for Milton.”
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