Hurricane Ian is set to become the most significant natural disaster for the insurance sector in decades after it swept through Florida and South Carolina, industry figures have warned. Initial forecasts for the industry’s losses from the storm have reached as high as $75bn, which would make it the costliest natural disaster ever in nominal terms. In real terms, only 2005’s Hurricane Katrina, which generated insured losses of $65bn —$99bn in 2022 money — has inflicted greater losses.
Ian hit Florida’s west coast on September 28 near the town of Fort Myers as a Category 4 storm, crossed the state to the Atlantic and then went on to hit South Carolina on September 30. At least 127 people died in Florida alone. RMS, a US-based risk modelling company, estimates the losses from Ian to private insurers at between $53bn and $74bn. Stonybrook Capital, a US investment bank, has estimated total costs for the industry at $75bn.
Billions of dollars of other losses will be borne by the US federal government’s National Flood Insurance Program and the state of Florida’s Citizens Property Insurance Corporation. Industry executives, risk modellers and analysts all expect that the storm would cement a recent shift by insurers towards levying higher premiums and avoiding some acute risks — such as Florida property — altogether.
