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Looking back


A WHIRLWIND FIVE YEARS


Katrina have arguably seen more changes to the market and its processes than any other half-decade.


F


The international insurance industry has changed enormously since Hurricane Katrina struck fi ve years


ago. Here we look at Another Bermudian success the major changes that were set in motion by the world’s costliest natural disaster.


The hurricane itself tore communities apart and


claimed 1,800 lives in the US, a fi gure that shocked the world and kicked off a political storm.


However, a windstorm swept through the insurance world too in the wake of Katrina, due to the scale of the $81 billion loss, including an insured loss of nearly $46 billion.


Even before the fi nal loss fi gures were had been calculated, US and international property and casualty insurers started to reassess the way they respond to natural catastrophes.


First, the storm meant insurers started working


more closely with policyholders and authorities to reduce the risk of loss. Second, insurers realised they have to handle disruptions in services and some have developed fully-functional mobile command operations.


A report by the Property Casualty Insurers Association of America found that other positive developments since the storm included insurers’ efforts to educate consumers about the importance of fl ood insurance and the use of advanced technology in customer communications and more sophisticated catastrophe models.


54 | INTELLIGENT INSURER | November 2010


ive years is a long time in international insurance, but the fi ve years since Hurricane


“The lessons learned from Katrina have helped to improve loss mitigation and disaster recovery efforts over the last half decade,” said David Sampson, president and CEO of the Property Casualty Insurers Association of America. “Additionally, while the insured losses were signifi cant, nearly $46 billion, the property casualty insurance industry has emerged from the Katrina experience on solid footing and today it is in a very strong position to fulfi l its obligations to stakeholders and provide the necessary coverage to help fuel economic recovery after a major storm.”


THE NEXT FIVE YEARS Despite the progress since Katrina, are there still


lessons that the insurance industry must learn? Professor Mark Saunders, Head of Weather


and Climate Extremes at the Aon Benfi eld UCL Hazard Research Centre, offers a suggestions: “A lot of insurers assess immediate post event loss using traditional cat models, so it would be good for the industry to have alternatives that are more transparent for users to understand in real time.”


Whatever the insurance industry looks like


fi ve years from now, one thing is certain—it will change just as much as it has done in the last fi ve years.


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