**Global Insurance Industry Braces for Impact of Hurricane Milton**
As Hurricane Milton bears down on the Gulf Coast of Florida, analysts warn that the Category 5 storm could unleash devastating losses of up to $100 billion on the global insurance industry. This would trigger a significant surge in reinsurance prices in 2025, potentially boosting the shares of some insurance companies.
The densely populated Tampa area is particularly at risk, with insured losses estimated to range from $60 billion to $100 billion if the hurricane makes direct landfall. This would put Milton on par with Hurricane Katrina, which caused the largest insured loss from a hurricane in 2005.
While the industry is expected to absorb the losses, analysts note that reinsurers have been adapting to the increasing frequency and severity of natural disasters by raising rates and excluding higher-risk business. This shift, combined with broader earnings diversification and larger reserve buffers, should help the sector weather the storm.
Shares in major reinsurers such as Swiss Re and Munich Re, as well as Lloyd’s of London players Beazley, Hiscox, and Lancashire, have taken a hit this week. However, analysts predict that these losses will be short-lived, with prices set to rebound as the industry prepares for harder pricing at upcoming policy renewals.
In fact, a major hurricane making landfall across Tampa Bay could mirror a realistic disaster scenario outlined by Lloyd’s earlier this year, which projected a $134 billion loss for the insurance sector. As the industry continues to grapple with the impact of climate change, reinsurers are poised to reap the benefits of their proactive approach to risk management.
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