Late last year, Florida was battered by not one but two highly destructive hurricanes, Helene and Milton, within a short span, leading to a cascade of damages and financial losses across various sectors, including a notable impact on Disney’s operations.

Overview of Hurricanes Helene and Milton

Hurricane Helene made landfall in Florida’s Big Bend region on September 25, 2024, as a Category 4 hurricane. It continued its destructive path northeast, causing widespread power outages and significant structural damage. Less than two weeks later, Hurricane Milton, initially a Category 5, weakened to a Category 3 before hitting near Sarasota on October 9, 2024. Milton was particularly noted for its unusual wind pattern, causing extensive wind damage across Florida.

Estimated Monetary Damages

• Combined Impact: The total insured losses from both hurricanes are estimated to be between $35 billion and $55 billion, according to Moody’s RMS and other catastrophe modeling firms. These estimates include damage to residential, commercial, and industrial properties, automobiles, and business interruption but exclude losses from boats, offshore properties, or the National Flood Insurance Program (NFIP).
• Hurricane Helene: The insured losses from Helene alone are expected to range from $8 billion to $14 billion, with significant contributions from wind damage, storm surge, and inland flooding.
• Hurricane Milton: This storm has been predicted to cause around $36 billion in insured losses, primarily due to its widespread wind damage. Milton’s impact was particularly severe due to its wind pattern, which was strong on both sides of the storm, affecting a larger area than typically seen.

Property and Auto Insurance Claims

• Property Insurance: By mid-October 2024, Hurricane Milton had led to over 152,180 property insurance claims in Florida, with an estimated total loss of about $1.9 billion. For Hurricane Helene, the figures were similarly high, with claims surpassing $1.2 billion by the same time frame.
• Auto Insurance: Milton resulted in more than 21,100 auto insurance claims, reflecting the significant damage to vehicles from flying debris and flooding. Helene’s auto claims were also considerable but less detailed in public reports.

Disney’s Financial Hit

Following these natural disasters, Disney announced that it had incurred losses amounting to $120 million due to Hurricanes Helene and Milton. This figure was reflected in their Q1 experiences operating income, highlighting the impact on their Florida-based operations, particularly at Disney World.

• Impact on Disney+: There was a modest decline in Disney+ subscribers in Q2 compared to Q1, which could be partly attributed to the disruptions caused by the hurricanes.
• Sports Operating Income: Disney also anticipated a $50 million hit to its sports operating income in Q2 due to exiting the Venu Sports JV, compounded by the hurricane impacts.

Broader Implications

The back-to-back hurricanes have underscored the vulnerability of Florida’s insurance market. Already reeling from high premiums and insurer exits, the situation might lead to further rate increases or market instability. The sheer volume of claims has strained resources, and there’s a noted concern over the potential insolvency of some smaller insurers unable to handle the magnitude of these claims.

Moreover, the recovery process for both property owners and businesses has been challenging, with business interruption claims being particularly contentious. Policyholders are advised to document losses to ensure adequate insurance recovery meticulously.

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(Image credit: Florida Today)