Traffic congestion is escalating on Interstate 275 South as people evacuate St. Petersburg, Florida, in anticipation of Hurricane Milton’s impact on October 7, 2024.
Octavio Jones Reuters
Top analysts on Wall Street are warning that Hurricane Milton, described as a rare event, may lead to financial losses exceeding $50 billion, with a potential maximum damage estimate soaring to over $175 billion.
This storm adds to the wreckage left by Hurricane Helen, which caused unprecedented destruction.
“At this point, it’s premature to calculate the insured losses, but the effects of a significant hurricane in one of Florida’s most populated areas are expected to be considerable. If our projections are accurate, mid-double digit losses could emerge. Some forecasts suggest a catastrophic event could usher in around $175 billion in damages for the Tampa region and $70 billion in the (Fort) Myers region.”
Determining the precise impact is complex and hinges on factors like timing and landfall location, although strikes closer to Fort Myers may incur reduced costs.
For context, analysts can reflect on Hurricane Ian, which struck in the Fort Myers vicinity as a Category 4 hurricane, resulting in over $50 billion in damages. Ian was categorized as a once-in-20-years occurrence.
“The potential financial repercussions could escalate further if Milton continues its path through the more developed areas of Tampa,” expressed Kinner.
Currently classified as a Category 4 hurricane, Milton may lose strength before reaching land.
“The market appears to be bracing for losses surpassing $50 billion (more than those incurred by Ian),” stated Wells Fargo, citing a potential damage range from $10 billion to $100 billion.
With the region still grappling with the aftermath of Hurricane Helen’s recent passage 12 days earlier, which Moody’s reported as resulting in damages estimated at around $11 billion, the financial strain is already substantial. Additional losses related to the National Flood Insurance Program are anticipated to be about $2 billion.
Analysts from the company have yet to evaluate the potential impact of Milton.
Kiki Keene and her father, Clinton Keene, navigate the debris of their family beach house following Hurricane Helen on September 28, 2024, in Horseshoe Beach, Florida, USA.
Marco Bello | Reuters
“Hurricane Helen has been the most significant event of the 2024 hurricane season so far and is poised to impact Florida very soon,” commented Mohsen Rahnama, Chief Risk Modeling Officer for Moody’s. “However, the situation can change rapidly with the approach of a significant Hurricane Milton.”
Moody’s also highlighted concerns that many areas most severely affected by Helen are without flood insurance, indicating that a substantial portion of the damage will remain uninsured, resulting in economic losses that won’t be covered by policies. “Thus, total losses may far exceed initial estimates,” added Firas Saleh, director of the company’s inland flood model for the U.S.
Though Milton slightly weakened to wind speeds of 145 mph as of Tuesday, it is expected to make landfall in Tampa on Wednesday, with storm surges of 10 to 15 feet anticipated for Tampa Bay.
While the threat and destruction to the region are expected to be profound, the storm does not present the same level of risk to adjacent states as Hurricane Helen did.
