Hurricane Milton Set to Reshape Property Catastrophe Insurance Market

News Americas, New York, NY, October 9, 2024: Hurricane Milton, which caused widespread devastation in parts of Florida on Wednesday night, Oct. 10th, is predicted to reshape the future of the property catastrophe insurance market, according to industry experts.

Chris McKeown, CEO of reinsurance ILS and innovation at Vantage Risk, believes the storm marks a significant moment for Florida’s already fragile insurance industry, which has faced premium spikes and insurer exits for years.

“This is an unprecedentedly large storm that defies many meteorological expectations,” McKeown stated at the ILS Bermuda Convergence 2024 Conference according to the Bermuda Royal Gazette reports. He explained that Hurricane Milton, which was at times classified as a Category 5 storm, will be a substantial event for both Florida residents and the state’s insurance industry. The hurricane, he added, underscores the increasing challenges facing insurers in covering losses as federal aid and underinsurance remain critical issues.

McKeown emphasized that early hurricane predictions have limited value for insurers, as they often arrive too late in the year to influence policy decisions. “Hurricane Milton is another reminder of the importance of securing sufficient capital to cover risk, and how unpredictable these events have become,” he said.

Mosaic Insurance co-founder and co-CEO Mark Wheeler echoed these concerns, noting that the insurance industry is evolving to meet complex risks but faces challenges in staying relevant. “The industry is in good shape overall, but we must adapt to emerging risks like cyber and environmental disasters,” Wheeler said, pointing to the growing demand for niche insurance products and managing general agencies in the U.S.