Munich Re marks 20th anniversary of Hurricane Andrew

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1 August 2012 | In The News

Munich Re marks 20th anniversary of Hurricane Andrew

Lasting impact on hurricane risk management

Twenty years ago Florida was hit with the worst storm it had experienced in 40 years. Hurricane Andrew caused unprecedented economic and insured loss. It had a lasting impact on the insurance industry and coastal communities, as insurers were forcd to re-evalaute assumptions about the potential for catastrophic loss and communities re-examined building codes and their enforcement.

Andrew was originally classified as a category 4 hurricane, but re-classified as a Category 5 hurricane with sustained winds of 165 mph and recorded gusts of 177 mph. It was the first major hurricane to strike South Florida in over 40 years, demolishing the towns of Kendall, Florida City and Homestead, destroying or severely damaging over 125,000 homes and resulting in 62 deaths.

At that time, Andrew resulted in the largest insured loss in the United States due to a natural catastrophe. Today, Andrew remains the third costliest insured US natural catastrophe behind Hurricane Katrina in 2005 and Hurricane Ike in 2008.

Building codes improved and enforced

Before Andrew, few in the property insurance industry believed that a hurricane could cause a loss on the order of tens of billions of dollars. Insurance premium levels in Florida were well below long term costs, maximum loss estimates proved extremely low, and insured properties were highly concentrated in areas at high risk. Compounded by poor building code enforcement in South Florida, the industry had unknowingly set itself up for a major catastrophe.

Despite improvements in building construction, societal influences such as urban development and population increases make extreme losses from a major hurricane in South Florida even more likely today than in 1992.

We have compiled information and background material on Hurricane Andrew and natural catastrophes for you, below.

Wake-up call for risk management

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© Copyright 2015 Munich Reinsurance America, Inc. All Rights Reserved.

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This publication is available exclusively to Munich Re clients. Please contact your Client Manager.


Main Navigation
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© Copyright 2015 Munich Reinsurance America, Inc. All Rights Reserved.

Note


This publication is available exclusively to Munich Re clients. Please contact your Client Manager.