Hurricane Michael is expected to inflict up to $4.5 billion in insured losses on coastal and inland Florida, according to a report from Standard & Poor’s.

But while the hurricane will be costly overall (it also inflicted damage on Georgia, Alabama and the Carolinas), the storm won’t buckle the stability of insurers or reinsurers dealing with other catastrophe losses, the ratings agency concluded.

“Although the third quarter of 2018 has seen various catastrophes, we believe that the combined earnings for the U.S. insurance and the global reinsurance sectors will absorb the total year-to-date catastrophe losses, including those from Hurricane Michael,” the analysts’ report states.

That said, the Standard & Poor’s report predicts insurers/reinsurers will experience losses that could exceed their 2018 catastrophe budgets.

Even so, Standard & Poor’s points out that Florida has another option – the Florida Hurricane Catastrophe Fund, which the ratings agency said is well capitalized with an estimated fund balance of about $14 billion. As well, the fund has $2.2 billion in pre-event bond proceeds, that Standard & Poor’s said it could use to help cover claims. Other options: Issuance of post-event bonds, or levy of emergency assessments “if needed to help pay claims or rebuild its claim-paying capacity for the subsequent hurricane season.”

The top 20 insurers in Florida for property coverage by direct written premium, from 1-10 are Universal Insurance Holdings, Citizens Property Insurance Corp., Tower Hill, State Farm, American International Group, FEDNAT, Assurant, Progressive, USAA and Heritage Insurance Holdings, according to Standard & Poor’s calculations.

Source: Standard & Poor’s