Hurricane Milton Insurance Loss Projections Range from $15B to $150B, Says Icosa Investments

Icosa Investments, a catastrophe bond fund manager, has predicted a wide range of potential insurance losses due to Hurricane Milton, estimated between $15 billion and $150 billion. This projection, influenced by the hurricane’s landfall location, intensity, and path, highlights the uncertainty surrounding the storm’s impact on both the insurance and catastrophe bond markets. Icosa noted that some catastrophe bonds have already seen their trading spreads widen, hinting at potential market volatility.

Drawing comparisons to previous hurricanes, Icosa mentioned the Swiss Re Cat Bond Index suffered losses between 10% and 15% following Hurricane Ian and early forecasts of Hurricane Irma hitting Miami. CEO Florian Steiger emphasized the difficulty in providing precise estimates at this stage, but the firm has outlined scenarios ranging from minor impacts to major industry-altering events. Investors are being cautioned to prepare for both extremes as the storm approaches landfall.