Why Insurance Stocks Chubb, Progressive, and Kinsale Capital Plunged Today

Group 1 - Hurricane Milton is projected to intensify into a Category 5 hurricane, impacting Florida's west coast, leading to significant declines in insurance stocks such as Chubb, Progressive, and Kinsale Capital [1][2][3] - The insurance sector's downturn is attributed to the anticipated damage from Hurricane Milton, which is expected to be more severe than the recent Hurricane Helene [2][4] - Heavy winds, rainfall, flooding, and rip currents from Milton could cause extensive property damage in Florida, a state already recovering from a recent hurricane [4][5] Group 2 - Chubb and Progressive are leading brands in property and car insurance, with Progressive having ceased new policy writings in Florida due to severe storm impacts [5][6] - Kinsale Capital, a newer specialty insurer, has significant exposure to high-risk lines, including commercial property and construction insurance, which could lead to substantial losses if Milton proves to be severe [6][7] - Investors are preparing for potential large catastrophe losses for insurers exposed to Florida property, including residential, commercial, and specialty/mobile homes [7][8] Group 3 - Despite the risks, insurance companies have been able to raise prices significantly in recent years, leading to one of the hardest markets in memory, which may allow them to remain profitable even during severe hurricane seasons [9][10] - Following catastrophic events, insurers often reduce exposure, leading to increased prices and potentially presenting buying opportunities for investors if there is a further sell-off in insurance stocks [10]