What is the predicted financial loss from Hurricane Milton and how does it relate to climate change?

By the time you read this, the Category 4 hurricane will have probably made landfall on the Gulf Coast of Florida early Thursday morning. It will likely be one of the most destructive extreme weather events to hit the region, still recovering from Hurricane Helene just two weeks ago. Here's just some of the figures quoted in terms of its impact.

• Reuters [Oct 9] reported that the hurricane could result in losses up to $100bn for the global insurance industry, which would put it be on a par with Hurricane Katrina, and would make it one of the costliest natural disasters in US history. Hurricane Milton could cost insurers up to $100 billion, analysts say | Reuters
• The Financial Times [Oct 9] notes that Hurricane Milton could trigger insurance losses up to $60bn, with analysts warning that it will “dent” insurers’ profitability. Hurricane Milton could cost $60bn in insurance losses (ft.com)

Scientists say that the frequency and severity of hurricanes are being exacerbated by climate change. Warmer sea temperature intensify wind speeds, giving hurricanes greater potential to inflict serious damage. Warmer sea temperatures also typically yield wetter hurricanes and sea-level rises contribute to greater flooding.

The insurance industry has responded to rising losses from natural catastrophes by hiking insurance rates and excluding higher-risk businesses. The Cenre of Climate and energy Solutions has curated billion-dollar extreme weather events over the past two decades. The top three, are all huricanes, each costing billions of dollars and lost lives.

Hurricane Katrina occurred in August 2005. It developed into a Category 3 storm, resulting in severe storm surge damage to the U.S. Gulf Coast and floods in New Orleans. The estimated cost was $193bn

Hurricane Harvey occurred in August 2017. It was Category 4 storm, dropping over 30 inches of rain on 6.9 million people in Texas. It produced flooding across Houston, with circa. 30,000 people displaced, and 200,000 homes and businesses damaged or destroyed, costing $155bn.

Hurricane Ian occured in September 2022 in Florida and North Carolina. It brought winds of 150 mph. It caused catastrophic damage with losses estimated at $113bn.