How a $100 Billion Hurricane Could Strike the US and What Insurers Need to Know

Karen Clark & Company’s August 2025 white paper explores a rising concern in catastrophe risk modeling: the increasing likelihood of a U.S. hurricane event causing over $100 billion in insured losses. The report asserts that hurricane damage is primarily driven by where a storm strikes, not how often hurricanes occur. Using updated models that factor in modern property values and population growth, KCC demonstrates that several historical storms would far exceed $100 billion in damages if they occurred today.

The report identifies key high-risk regions: Florida’s Tri-County area (Miami-Dade, Broward, and Palm Beach), the Galveston-Houston corridor in Texas, and the densely populated Northeast. For example, a repeat of the 1926 Great Miami Hurricane would now generate over $200 billion in insured losses. Similarly, a modern-day repeat of the 1900 Galveston Hurricane could result in over $100 billion in wind-related damages alone. The paper emphasizes that even a 100-mile shift in a storm’s track—like what happened with Hurricane Irma in 2017—can mean the difference of tens of billions in industry losses.

To aid insurers and reinsurers, KCC promotes its Characteristic Events (CE) methodology, which maps 100-year hurricanes every 10 miles along the U.S. coastline based on actual hazard probability. By comparing CE results to traditional Probable Maximum Loss (PML) metrics, insurers can more accurately pinpoint regional exposure concentrations and potential vulnerabilities in their portfolios. This level of granularity enables better-informed underwriting, reinsurance decisions, and regulatory reporting.

The key takeaway: The U.S. has been lucky. The absence of a major hurricane strike on a densely populated metro area in recent decades doesn’t mean the risk is low. Insurers must not rely solely on PMLs, which may understate regional exposure, but should incorporate CE analysis to build resilience against what may be inevitable—a $100 billion hurricane.