The insured losses from Hurricane Milton could be $30 billion to $50 billion, Fitch Ratings has estimated, which would be the largest storm loss claims since Category 4 Hurricane Ian’s 2022 losses of $60 billion.

It would mean that industry insured losses for 2024 is already over $100 billion for the fifth consecutive year. Fitch said.

The agency does not see credit for rated property/casualty insurers and global reinsurers to be that affected, given their very strong capital levels.

But Florida property insurance specialists not rated by Fitch “are vulnerable to the extent the major hurricane generates losses in excess of reinsurance limits”.

Milton arrived in Florida as a Category 3 hurricane and left for the Atlantic Ocean as Category 1, after causing considerable economic and insured losses from high winds, substantial storm surge, heavy rainfall, tornadoes and flooding.

Widespread damage included a collapsed crane in downtown St Petersburg during the thrashing winds on Wednesday night — which left a gaping hole in an office building that houses several businesses, including the Tampa Bay Times.

The crane fell from the Residences at 400 Central, the 46-storey skyscraper being built across from the Times’s office. There were no reported injuries.

Fitch analysts said: “Milton will be a 4Q and 2024 earnings event for large rated insurers with Florida exposure.

“The insurance losses will hit reinsurance attachment points, shifting a meaningful amount of losses to the reinsurance market, particularly from the Florida specialist companies with lower retentions.”

Some uncertainty comes because of Milton’s arrival just as Florida was largely in recovery mode from Hurricane Helene damage two weeks before.

Fitch said: “Higher demand and limited supply of labour and materials needed to adjust claims and repair/rebuild following multiple large-scale disasters can increase insured losses by 20 per cent or more.”

With the continuation of heightened catastrophe losses, the potential for rate declines in property catastrophe business in 2025 is likely to be limited, as [insurers and reinsurers] maintain underwriting discipline.

Fitch added: “Florida property experienced flat to 10 per cent rate declines at June/July 2024 reinsurance renewals, reflecting the limited impact of the 2023 hurricane season.

“The property market could see a hardening of premium rates, depending on the ultimate Milton losses and the amount of additional catastrophe losses for the remainder of 2024.

“However, the sizeable property reinsurance price increases experienced in 2023 are unlikely given the more adequate current pricing environment. A broad spectrum of insurance companies will be affected by Milton as primary Florida homeowners’ writers manage risk accumulations by ceding a large proportion of business to third-party reinsurers.

“Most large national underwriters do not have substantial market share in Florida and have cut policies in force, via non-renewals to manage balance sheet exposure and reinsurance programme costs.

“The Florida homeowners’ insurance market’s precarious position will weaken further with the destruction generated by Milton.

“The sufficiency of reinsurance coverage is a key concern for Florida homeowners’ specialists given relatively low absolute capital levels, limited business diversification and questions as to their ability to raise capital following large loss events.

“Florida homeowners’ specialist reinsurance programmes are likely able to absorb losses from events up to approximately one in 100 years.

“Losses above such levels could go ‘over the top’ of catastrophe reinsurance programmes, leading to a potentially rapid erosion of capital.

“We do not expect Milton’s losses to exhaust catastrophe reinsurance protection for most Florida specialists; although individual insurers with unique risk concentrations or meaningful modelling errors may report higher-than-expected gross losses.

“Insurers remain exposed should an additional storm or storms hit Florida this hurricane season. Milton will test the numerous recent Florida legislative and regulatory tort reforms, including the removal of one-way attorney fees and prohibition of the assignment of benefits.

“However, the financial benefit of the reforms will need to be proven through various catastrophe events before they can be deemed successful and supportive of longer-term private market capacity.”