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HCI estimates insured losses up to $750 mn from Hurricanes Debby, Helene, Milton

HCI estimates insured losses up to $750 mn from Hurricanes Debby, Helene, and Milton

HCI Group, the parent company of property & casualty insurtech TypTap, estimates insured losses between $600 mn and $750 mn due to hurricanes Debby, Helene, and Milton.

HCI expects a net expense of around $60 mn after reinsurance recoveries and the reversal of benefits from a multiyear reinsurance agreement.

This reflects losses from hurricanes Debby and Helene. Despite these losses, the company still anticipates reporting a pretax profit for the quarter.

Hurricane Helene has caused insured losses estimated at around $6.4 bn, according to catastrophe risk modeling specialist Karen Clark & Company. Insurers could face losses of as much as $15 bn if Hurricane Helene makes landfall close to Tallahassee, according to R Street. The losses are driven by wind, storm surge, and inland flooding across 9 states.

HCI estimates insured losses up to $750 mn from Hurricanes Debby, Helene, and Milton

TypTap has leveraged internally developed technology enabling it to grow organically in Florida. With the operating environment improving in Florida, we see an opportunity to supplement TypTap’s existing business through the Citizens depopulation program

Paresh Patel, HCI’s chairman and chief executive officer

For the fourth quarter, Hurricane Milton is expected to generate net retained losses of approximately $125 mn, again factoring in reinsurance recoveries and the reversal of accrued benefits under the same reinsurance agreement.

HCI CEO Paresh Patel emphasized the company’s commitment to supporting policyholders after these events.

We are responding swiftly to ensure claims are processed efficiently.

Patel also noted the company’s ongoing participation in the Citizens Property Insurance Corp.’s depopulation program, reporting strong early adoption rates.

HCI attributes its ability to absorb these losses to its solid financial foundation. Patel pointed to the company’s conservative reinsurance program, which includes a $2 bn occurrence reinsurance limit and a $3 bn aggregate reinsurance limit.

Verisk estimates insured property industry losses from Hurricane Milton to fall between $30 bn and $50 bn.

The estimate includes wind damage, privately insured storm surge, and precipitation-induced flood losses. Wind damage accounts for most of the insured losses.

In 2023, the largest writers of homeowners multiperil insurance in Florida, based on direct premiums, included Citizens Property Insurance Corp. (18.57% market share), Universal Insurance Holdings Group (8.47%), State Farm Group (6.88%), Florida Peninsula Group (4.88%), and Tower Hill Group (4.35%).