Catastrophe modeller Karen Clark & Company estimates private insured losses from Hurricane Michael, which hit the Florida coast last week, could approach $US8 billion ($11.2 billion).
Michael was the most powerful hurricane to hit mainland US since Hurricane Andrew in 1992, and the most intense to make landfall in the Florida Panhandle region, having strengthened to Category 4 just before striking the coast.
The hurricane was the second to cause widespread damage in the US in recent weeks, with Florence leading to flooding last month in North Carolina, ending a relatively benign start to the tropical storm season.
“With a higher wind-related loss component, private insurers will bear a greater proportion of losses from Michael than Florence, where most of the significant flooding loss is uninsured or is covered by the National Flood Insurance Program,” Fitch Ratings said.
Florida specialty insurers are likely to have considerable gross losses but typically have plenty of external reinsurance, and the industry is well placed to absorb the event, the ratings agency says.
Fitch does not expect the storm to lift reinsurance rates, given the muted response to much larger hurricane catastrophes last year.
Modeller AIR Worldwide says Michael is the most intense October hurricane to have struck land in the North Atlantic basin, which includes the Gulf of Mexico and Caribbean.