The Florida Hurricane Catastrophe Fund remains in “very good position” after Hurricane Milton, according to the head of Florida’s Division of Bond Finance.
But, Ben Watkins on Thursday noted that only modeled losses are available for Hurricane Helene, which hit in late September, and no figures have been advanced for Milton yet.
The CAT fund is in a very good position to cover the property insurance company losses at the levels that it is responsible for covering, Watkins said. The fund has $6 billion in fund balance, on an accounting basis, to pay Helene and Milton losses. In monetary terms it has $5 billion to $6 billion more, but this sum has been promised to pay for the losses from Hurricane Ian, which hit in 2022.
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Even if the fund were to run through all of $6 billion, it has access to $2 billion to $3 billion in pre-event bonds for liquidity purposes. The fund would only turn to post-event borrowing for liquidity purposes if all of this was run through, he said.
Estimates for
Modeled losses won’t be available for Milton for a few days, he said, cautioning that modeled losses are preliminary and actual losses can be materially different.
Moody’s Ratings was more concerned about the impact on the
“Local governments in Hurricane Milton’s path, despite having considerable financial resources, will face significant credit challenges because of the heavy reliance on state and federal disaster recovery assistance and the high costs of public infrastructure repairs,” said Moody’s Senior Analyst Valentina Gomez.
Florida’s west coast could suffer, Gomez said, as its “robust growth in population and property values may decelerate or even decline as individuals reevaluate the region’s significant exposure to weather-related disasters.”
Hurricane Milton made landfall as a Category 3 storm in Saratoga, halfway up the west coast of Florida, Wednesday evening. St. Petersburg got 18.3 inches of rain. The storm spawned 20 tornadoes. More than 3 million households were without power as of Thursday morning.
The hurricanes may have caused widespread damage to electric distribution across Florida, said David Kamran, assistant vice president at Moody’s. However, “municipal electric and gas utilities are largely expected to be financially insulated, given measures to counteract any losses of revenues and support for the restoration of electric distribution.”
They are generally in healthy financial positions and will get FEMA support, “which usually covers 75% of recovery costs,” he said, plus assistance through “agreements coordinated by the Florida Municipal Electric Association.”
Toll roads should do fine financially despite temporary pauses in toll collections on several, said Moody’s Vice President Cintia Nazima.
The storms should have little impact on not-for-profit healthcare entities and airports financially, said Moody’s Associate Lead Analyst Vanessa Chebli and Moody’s assistant vice president Ursula Cassinerio.
The Central Florida Tourism Oversight District