Generator manufacturer Generac is booming, insurance stocks are falling due to Hurricane Milton

Shares in the emergency power 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 and approaching the west coast of Florida by Wednesday. Forecasters say Tampa Bay could experience a storm surge of 8 to 12 feet.

Generac hit an intraday high of $174.35, up nearly 9% from Friday’s closing price. The energy production company also hit a new 52-week high.

Hurricane Milton follows Hurricane Helene, which killed more than 220 people and wreaked havoc across the Southeast, particularly North Carolina.

Meanwhile, insurance stocks exposed to a weather disaster are falling due to potential insured losses related to Hurricane Milton. Allstate, travelers, Chubb and Progressive saw their shares fall more than 4% AIG all fell by more than 3%.

Fort Lauderdale, Florida-based Universal Insurance fell about 20% as the disaster-prone Gulf Coast risk carrier may face increased hurricane risk.

Stocks of property and casualty insurers and reinsurers are likely to come under pressure as Milton could lead to a sharp decline in their fourth-quarter profits, Joshua Shanker, a research analyst at Bank of America, told clients in a note Monday.

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