Generator producer Generac rises, insurance stocks fall due to Hurricane Milton

Shares of a backup energy generation company Generac Holdings rose more than 8% on Monday as Hurricane Milton quickly strengthened into a Category 5 storm.

According to the National Hurricane Center, Hurricane Milton is expected to move north of the Yucatan Peninsula on Monday and Tuesday before crossing the Gulf of Mexico to approach the west coast of Florida. Forecasters say Tampa Bay could experience a storm surge of between 8 and 12 feet.

Generac hit an intraday high of $174.35, up nearly 9% from Friday’s close. The power generation company also hit a new 52-week high.

Hurricane Milton follows Hurricane Helene, which killed more than 220 people and caused destruction in the Southeast, especially North Carolina.

Insurance stocks exposed to weather catastrophes, meanwhile, are falling due to potential insured losses from Hurricane Milton. Allstate, Travelers, Chubb and Progressive saw their shares fall by more than 4% AIG all fell by more than 3%.

Universal Insurance, based in Fort Lauderdale, Florida, fell about 20% as the catastrophe-prone airline with exposure to the Gulf Coast could see increased hurricane risk.

Shares of property and casualty insurers and reinsurers should come under pressure as Milton could result in a sharp decline in their fourth-quarter earnings, Joshua Shanker, a research analyst at Bank of America, told clients on Monday in a note.

Forecasters have been warning for months about an “extremely active Atlantic hurricane season” this year. This is due to warm sea surface temperatures that serve as a fuel source for hurricanes, according to Colorado State University Tropical Weather and Climate Research.