Hurricane Milton, a tropical cyclone that swept across Florida last week, has left insurers facing a massive storm bill. Risk modeling firm Karen Clark & Co. estimates that the storm could result in $36 billion in claims, BNN Bloomberg reported.

While the damage wasn't as severe as early predictions suggested, Milton has reportedly impacted the insurance sector, coming just weeks after Hurricane Helene brought similar devastation. The damages were caused by high winds, storm surges, and inland flooding,

Impact on the Insurance Industry

Hurricane Milton was reportedly one of the most severe Atlantic hurricanes, with winds reaching 120 mph. It swept through central Florida, leaving a trail of destruction and millions without power.

According to Moody's, the combined insured losses from both Milton and Helene could be as high as $55 billion, the Financial Times reported. Private insurers and reinsurers will reportedly bear most of the losses caused by Hurricane Milton.

Early estimates put the damage from Hurricane Milton in the tens of billions of dollars. It’s the latest example of how climate change is making large parts of the planet too expensive to protect https://t.co/Rd1VD2a3MH

— Bloomberg Markets (@markets) October 14, 2024

The recent storms have raised concerns about the broader economic impacts on the insurance industry. With property catastrophe reinsurance prices likely to increase during the critical January renewals, the cost of maintaining insurance coverage in high-risk areas like Florida could skyrocket. According to weather forecasters cited by BBC, the storms could continue in the eastern parts of the state.

Hurricane Milton's Claims

Karen Clark & Co.'s estimate for Hurricane Milton's claims remains lower than Hurricane Ian, which led to $62 billion in payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term in 2022, or Hurricane Katrina, whose damage adjusted for inflation totaled $102 billion in 2005.

However, Hurricane Milton's $36 billion in payouts is part of a larger trend as climate change continues to drive more severe storms. According to a group of scientists, Milton's intensity worsened because of human-caused climate change.

Besides the impact of Hurricane Milton, the US financial market is facing uncertainty ahead of the upcoming presidential elections. According to a report by Finance Magnates, history shows that US elections have never led to anything extraordinary in terms of financial markets’ performance.

The report showed that some research highlights a correlation between the party in power and economic performance. Data from the post-World War II reportedly highlight that the US economy has grown faster under Democratic presidents than Republican presidents.