8 Insurance Industry Impacts of Hurricane Andrew

Technology, regulation, construction and the P&C insurance industry itself all have changed since – and in some instances, because of – Hurricane Andrew, the category 5 storm that made landfall in south Florida on August 24, 1992. Here are eight ways that the catastrophe changed the way insurance companies do business.
August 24, 2012

3. Extreme Weather Is Becoming the Norm

"Some progress has been made in the last 20 years, but there is still a lot of ground to be covered still in the claims space given the sharp increase in both the frequency and severity of these natural catastrophes. According to Munich Re, the 2011 total for worldwide weather-related losses, at $105 billion, is not only an all-time record but is double the figure for 2010. This is becoming the norm, rather than the exception. To adjust to this new reality, insurers need to look beyond modeling “events” to modeling more complex arrays of catastrophe scenarios. In addition, insurers should model for climate-related events which are concurrent with other conditions such as an economic recession or terrorism event. Finally, insurers should take a more holistic view of how they can positively impact sustainability. For example, offering incentives for “green oriented” offerings such as hybrid vehicles, carbon emission credits, and sustainable structures can have a positive impact on the overall climate in the long term."

— Michael A. Costonis, a senior executive in Accenture’s Insurance practice and the global lead for Claims Services

Source: Accenture

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