Not only are catastrophes becoming increasingly frequent and severe, their impact can trigger a cascade of interconnected risks. Delve into Moody's latest insights on recent catastrophic events.
Not only are catastrophes becoming increasingly frequent and severe, their impact can trigger a cascade of interconnected risks. Delve into Moody's latest insights on recent catastrophic events.
Hurricane damage is increasing as more frequent and intense storms impact rapidly developing, high-risk areas such as Florida. With nature’s raw power threatening homes, businesses, infrastructure, and communities, how can models and data help mitigate against losses, while supporting rebuilding and recovery?
The Eye of the Storm walks us through Tampa, Florida, to explore how the one-two punch of hurricanes Helene and Milton last year reshaped the region – and how the lessons learned from Hurricane Andrew over 30 years ago have driven innovation in the insurance industry in the form of advanced catastrophe modeling and property analytics. We examine how these solutions are improving the resilience of our communities and economy to extreme weather events while we prepare for the next major storm.
After absorbing steep losses from last year’s Los Angeles County wildfires, US personal and commercial insurers will likely report healthy combined ratios in 2026, excluding catastrophes.
Shocks are rippling across sectors, from rising insurance premiums to lower property prices and tax revenue. Adaptation and resilience investment and good governance can limit exposure.
As extreme weather events become more frequent and severe, investment in adaptation and resilience will be key to mitigate risk and support credit strength.
November’s severe flooding in South and Southeast Asia highlighted the region’s vulnerability to physical climate risks, especially given its limited natural catastrophe insurance coverage.
Moody's RMS Event Response publishes estimated insured losses for Hurricane Melissa which made landfall as a Category 5 storm near New Hope, Jamaica, on October 28 - the strongest hurricane in recorded history to make landfall on the island.
Physical risks such as drought and sea-level rise could cut global economic output by about 17% by 2050 under current policies. Adaptation measures can rein in costs, but financing is often elusive.
While loss estimates from Hurricane Melissa will take weeks or months to determine, economic losses are expected to be multiples of the insured losses due to low levels of insurance coverage in affected countries.
Floods, drought, hurricanes and wildfire have raised the threat of economic disruption and insured losses in Brazil, Colombia, Mexico and Chile, spurring policymakers to focus on limiting future risk.
Follow the latest on Hurricane Melissa at our Insurance Solutions live blog.
Wildfires that swept through Manitoba, Saskatchewan and Alberta are projected to reduce GDP growth in those provinces. Urban expansion into forested areas has increased exposure to wildfire risk.
Unprecedented damage resulting from a Category 5 storm would require federal aid, insurance payouts and government resources to facilitate recovery and stabilize the economy.
What is behind this quiet first half of the 2025 North Atlantic Hurricane Season, and will the pre-season forecasts that called for an active season still hold? James Cosgrove and Jeff Waters examine the season so far, the factors that could explain the lack of activity, and what could influence the rest of the season.
Analysis from Moody’s estimates that in 2050, the global economic impact of physical risk may reach $41.4 trillion, or a 14.5% loss in gross domestic product (GDP). Roughly two-thirds of this economic loss could be attributed to chronic factors such as sea level rise and productivity loss, with the remaining third attributable to more frequent and severe natural disasters.
Extreme weather-related risks have resulted in less affordable and available property insurance in many areas, which presents growing risk to municipal credit quality.
Most new issuance covers US hurricane, earthquake and severe convective storm risks, reflecting both the high value of insured property and the frequency of large loss events in the US.
In this new study, we assess the macroeconomic implications of a Category 5 hurricane hitting Miami, using a novel combination of natural catastrophe models and economic forecasting.
Eighty percent of New Orleans, and 134,000 homes in the city, were inundated during Hurricane Katrina. Tracking north close to the east side of New Orleans, Katrina made two landfalls on Monday, August 29, 2005, both at Category 3 strength.
Moody’s analysis reveals the consequences would lead to a more severe economic downturn than a typical recession, primarily due to population loss and rising insurance costs.
Failure to replenish the fund would leave the state's three largest investor-owned utilities with less protection against wildfire liabilities, putting their credit quality at risk.
While states may be able to absorb aid reductions, they would need to shift budget priorities and use reserves or debt, which would divert funds from other needs.
Extreme weather events are becoming more frequent and more intense across Canada. Damage and loss mitigation strategies will help limit credit exposure to physical risks.
The updated hurricane models allow Moody’s to continue to provide the (re)insurance market with the most current, comprehensive, and well-validated view of the hurricane risk landscape.
Weather research organizations predict above-average tropical cyclone storm activity in the Atlantic Ocean this year, but below the level observed during the past couple of years.
The Florida Public Service Commission’s approval of storm protection plans for the state’s investor-owned utilities reflects continued support for efforts to manage exposure to extreme weather events.
The immediate growth and employment impacts of the Eaton and Palisades wildfires, the second-most destructive in California's (Aa2 stable) history, are likely to be modest as reconstruction and cleanup efforts, insurance payouts and federal disaster aid help to compensate for temporary losses in economic activity and taxable value.
While the initial financial cost of the wildfires will be manageable, potential legal settlements will likely cost billions.
Property damage and rising insurance costs pose risk to some residential mortgage securitizations. However, performance for auto- and utility-related securitizations will be stable.
Major risk modelers have put out estimates of insured losses, including losses to the California FAIR Plan, ranging from $20 billion to $45 billion.
The damage from some of the worst wildfires in California's history will push more property owners toward the more expensive, state-backed insurance market and intensify cost-of-living pressures.
The estimate reflects insured losses to date for the private market and California FAIR Plan from fire, smoke, and evacuation impacts from the five fires including the Palisades and Eaton Fires.
While the full extent of the destruction is unknown, the fires are likely to be credit negative across multiple sectors, constraining economic activity, and stressing housing and insurance markets.
Keep updated with the latest information and insights from Moody's RMS Event Response and our wildfire experts.
Los Angeles Department of Water & Power, CA Power System serves the area ravaged by the Palisades fire, which early estimates indicate could be the costliest wildfire disaster in California history.
The Eaton fire poses a potential risk to Edison International and its Southern California Edison subsidiary, given the proximity of SCE’s transmission lines to the fire. The fire’s cause has not been determined.
As of writing, 25 people have lost their lives, over a hundred thousand have been displaced and over 39,000 acres have burned. Meanwhile over 12,000 structures have been damaged or destroyed.
Regional damage and lost output will prove historic, and the story has yet to be fully written.
For the citizens of California, living with the threat and impact of wildfires has become very familiar.
The devastating flooding recently caused by Hurricane Helene highlights increasing flood risk for local economies and tax bases, in particular in the Eastern and Southern US. Coastal and inland flooding events are becoming more frequent and severe, leading to substantial property damage and economic disruption.
Following heavy flooding on 29 October, 75 municipalities in the Valencia region (Ba1 positive) suffered significant harm to people, property, infrastructure, businesses and crops.
Most securitizations have significant geographic diversification and exposed deals will likely be protected by servicer support, insurance coverage, deal structures and other mitigants.
Consorcio de Compensacion de Seguros will shield insurers and reinsurers from losses linked to the recent floods in eastern Spain. Rated Spanish banks’ loan exposure to the area is relatively small.
A robust policy framework with liability limits and legal and financial safeguards is essential to protect the credit quality of regulated utilities in the event of catastrophic wildfires.
While Spanish government aid will help mitigate recovery costs, the sheer scale of flood damage to infrastructure and economic activity remains credit negative for the country's southeastern regions.
While early transition finance investment has economic, financial and credit benefits, emerging markets face stark choices balancing limited financing against other social and development priorities.
Given the elevated level of insured catastrophe losses globally, losses from Hurricanes Helene and Milton should help stabilize property catastrophe reinsurance pricing ahead of January 2025 renewals.
Hurricane Milton - over 40 blog update posts covering Milton from its development, landfall, and post-event analysis.
Florida’s three major investor-owned utilities are likely to recover their storm costs in full but may have to do so over a longer period than the 12 months they are typically granted.
Hurricane Milton brought damaging winds, life-threatening storm surge and heavy rainfall to Florida in the aftermath of Hurricane Helene.
In the wake of Hurricane Milton, we estimate lost output of $10 billion to $15 billion and damage between $40 billion and $70 billion for a price tag that will wind up between $50 billion and $85 billion.
Hurricane Helene’s projected track across Florida’s panhandle and the South has potential implications for public safety and business continuity. Moody’s hurricane tracker shows commercial real estate with a greater than 50% probability of facing wind speeds greater than 50 mph.
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