Moody’s RMS Event Response Estimates Private Market Insured Losses for Hurricane Milton to be between US$22 Billion and US$36 Billion

NEWARK, CA – October 17, 2024 – Moody’s RMS Event Response estimates total private market losses from Hurricane Milton to be between US$22 billion and US$36 billion, with a best estimate of US$26 billion. This estimate represents insured losses associated with wind, storm surge, and precipitation-induced flooding from the event.   

Hurricane Milton was the thirteenth named storm of the 2024 North Atlantic hurricane season, the fifth hurricane to make landfall in the U.S. this season, and the third to make landfall in Florida. It made landfall as a Category 3 major hurricane near Siesta Key, Florida on October 9, 2024. At landfall, Milton had maximum sustained winds of 120 miles per hour (193 kilometers per hour) and a central pressure of 954 hPa.

Moody’s RMS Event Response estimates total combined private market insured losses from Helene and Milton to be between US$30 billion and US$50 billion. This combined loss estimate refines an earlier preliminary loss estimate of US$35 billion to US$55 billion.

Additionally, Moody’s RMS Event Response estimates losses to the National Flood Insurance Program (NFIP) across both events could exceed US$5 billion.

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.”

This Milton industry loss estimate reflects insured wind and storm surge losses in Florida, based on an analysis of ensemble footprints in Moody’s RMS Version 23 North Atlantic Hurricane Models. The ensemble footprints are reconstructions of Milton’s hazard that capture the uncertainties surrounding observed winds and storm surge.

The industry estimate also includes impacts from precipitation-induced inland flooding in the affected regions of Florida, using flood footprint reconstructions in Version 1.2 of Moody’s RMS U.S. Inland Flood HD Model.

Exposure informing the private market loss estimates was based on Moody’s RMS U.S. Hurricane and U.S. Private Flood industry exposure databases. Exposure for the NFIP loss estimate was based on Moody’s view of NFIP policy-in-force data published by FEMA.

Moody’s RMS Event Response developed and validated the wind, storm surge, and inland flood reconstructions and corresponding loss estimates using proprietary and publicly available data, including wind station observations, river gauge water level data, web reconnaissance, aerial imagery analysis, and Moody’s RMS HWind real-time data products.

Informing this analysis, Moody’s RMS conducted detailed field reconnaissance for this event, with a team of experts on the ground surveying the most impacted areas across Florida, spanning more than 1,300 miles.

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.”

Estimated losses for Hurricane Milton reflect property damage and business interruption to residential, commercial, industrial, watercraft, and automobile lines of business. It considers sources of post-event loss amplification (PLA) 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.

Jeff Waters, Director - North Atlantic Hurricane Models, Moody’s, commented: “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.”

Moody’s RMS Event Response expects private market losses for Milton to be largely driven by wind, with smaller contributions from storm surge and inland flood impacts.

Losses for the NFIP are expected 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. 

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The technology and data used in providing this information are based on the scientific data, mathematical and empirical models, and encoded experience of scientists and specialists. As with any model of physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses. 

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