Insurers will collectively take a less than $10 billion hit on Hurricane Idalia, according to analysis generated shortly after the storm tore through Florida, Georgia and South Carolina.

The total would be far less than the original $20 billion estimates and far less than costs related to Hurricane Ian in 2022.

Idalia slammed into the Florida coast on Wednesday morning as a Category 3 storm, bringing high winds and a storm surge. It then headed out to sea towards and around Bermuda.

The storm is expected to bring tropical storm-strength winds to the island.

UBS is placing the insured loss so far at $9.4 billion, while BMS Group, an insurance broker, puts the estimate at between $3 billion and $6 billion, according to a report in Barron’s.

“It will not be the straw that breaks the camel’s back,” said Sridhar Manyem, senior director, industry research and analytics, at AM Best in Oldwick, New Jersey.

The damage is far less than at first feared because the storm dropped from Category 4 to Category 3 before making landfall and hit an area less densely populated with lower insured value.

“The Big Bend region of Florida has significantly lower population and exposure density relative to much of the state,” wrote Callum Higgins, senior product manager, Moody’s RMS, in a report. He added that average insured value in the area was a fraction of that elsewhere in the state.

“The other mitigating factor is the relatively small wind field of Idalia, with a low radius to maximum winds and the intensity of wind hazard rapidly declining outwards from this, reducing the spatial extent of the most damaging winds,”

AM Best generally agrees with the consensus analysis, although it would not put an exact figure on total damage.

“If you compare it to Ian, this hurricane is one category lower,” noted Mr Manyem.

“It will be an earnings event”, he added, but well within the capacity of most balance sheets.

In 2022, Hurricane Ian made landfall in Florida as a Category 4 storm. It killed more than 150 people and left more than $100 billion of damage in its wake.

Hurricane Idalia came as the latest in a series of major loss-creating events, including the Maui and Canada wildfires.

It also came as reinsurance rates are up, in part due to Ian, and after insurers became less willing to take on Florida exposure. Most of the loss from the hurricane is expected to be borne by insurers rather than reinsurers.

“Given hardening reinsurance market conditions and increased retentions in the recent past, the impact on reinsurers is expected to be minimal,” AM Best wrote in a report.

Some Florida-only insurers may face challenges related to the Hurricane.

In the report, AM Best wrote: “The Florida property market has become more concentrated in just two years, as only 15 companies account for over 60 per cent of property direct premiums written in the state, compared with 58 per cent in 2020. Citizens Property Insurance Corp’s premium growth has nearly quadrupled over the last two years, to $3.2 billion in 2022 from $774 million in 2020, causing its market share to more than double to 9.8 per cent.”