As Hurricane Milton gathers strength in the Gulf of Mexico, the prospect of significant damage to Florida’s Gulf Coast is weighing heavily on insurance companies. The hurricane, now a Category 4 storm, is expected to strike the Tampa Bay area later this week, causing fears of tens of billions of dollars in insured losses and sending insurance stocks plummeting.
Shares of Everest Group (EG), a major provider of insurance and reinsurance policies, plunged 8.5% on Monday—the largest drop of any S&P 500 stock—as investors brace for the potential fallout. Bermuda-based insurers Arch Capital Group (ACGL) and Assurant (AIZ) also saw steep declines of 6.2% and 5.5%, respectively.
The insurance industry is already grappling with the aftermath of Hurricane Helene, which made landfall in late September as a Category 4 hurricane in Florida's Big Bend region. Helene’s devastation stretched as far north as Ohio, causing catastrophic flooding, killing over 200 people, and leaving millions without power.
According to Moody’s RMS Event Response, private market estimates for insured losses from Helene have risen to between $8 billion and $14 billion, with a best estimate of $11 billion—significantly higher than the $6.4 billion previously estimated by catastrophe modeling firm Karen Clark & Co.
The potential for even greater losses looms with Milton's approach. Early forecasts suggest that if Milton strikes the highly populated Tampa Bay region, it could lead to tens of billions of dollars in insured damages. This echoes the devastation caused by Hurricane Ian in 2022, which drove insurance losses up to $65 billion.
Local insurers with a strong presence in Florida have been particularly hard hit. Shares of American Coastal Insurance Corp., which wrote 95% of its gross premiums in Florida last year, dropped 15%, while Heritage Insurance Holdings Inc., which saw a third of its premiums originate from Florida, fell 23%.
Larger national insurers like Progressive Corp (NYSE:PGR), Allstate Corp (NYSE:ALL), and Chubb Ltd (NYSE:CB) have also been affected, though their share declines were more moderate, in the low single digits.
Despite these losses, some insurers showed signs of recovery on Tuesday. The KBW Insurance Index, a measure of insurer performance, rebounded over 1% in midday trading.
In addition to the economic impact, Helene’s devastation has also affected political dynamics in key swing states. Both Georgia and North Carolina—states critical to the upcoming presidential election—suffered damage from the storm. With 16 electoral votes each, both states could play a pivotal role in determining the election outcome. President Trump currently leads in both states, but the margin is within the statistical error.
No emergency voting measures or extensions of voter registration deadlines have been announced, raising concerns about voter turnout in the storm-affected regions.
As the election nears, national polling remains tight, with Harris holding a slim lead. However, the damage from Hurricane Helene and the anticipated impact of Hurricane Milton could yet reshape the political landscape as uncertainty looms over the electorate in these swing states.
With less than a month to go before Election Day, both the insurance industry and the political climate remain in flux as the nation watches to see how Florida and its surrounding regions weather the coming storm.