Lessons from other major events (2005-2025)

Startling as the devastation of Katrina was, other catastrophes in the ensuing two decades provide additional lessons in disaster preparedness and risk mitigation. The following are a sampling of events with far-reaching impacts on the insurance industry and risk management.

Hurricane Ike (2008)

Ike made landfall in Galveston, Texas, as a Category 2 hurricane, but its breadth produced storm surge equivalent to that of a Category 4 storm. Ike also maintained strength as it moved into the upper Midwest and eastern Canada.

Some of Ike’s lessons were that moderate-intensity hurricanes can still produce extensive damage, and that damage can occur far inland.

Tohoku earthquake and tsunami (2011)

The Great East Japan Earthquake was a 9.0 magnitude temblor that spawned a massive tsunami. The combined events claimed more than 22,000 lives and caused the shutdown of a nuclear reactor at Fukushima.

The earthquake and tsunami highlighted the importance of enhancing disaster response strategies, streamlining evacuation procedures and shelter coordination, and ensuring rapid restoration of essential services such as water and electricity. In a seismically active region with a history of strong quakes, preparation for the next mega-quake is essential.

Superstorm Sandy (2012)

Sandy was an exceptionally large post-tropical cyclone that was more than 1,100 miles wide. It claimed more than 280 lives, inflicted damage in seven countries and 24 U.S. states, caused extensive power outages, and flooded lower Manhattan.

Sandy taught insurers and businesses the importance of anticipating flood severity during a full moon and high tide, deploying flood defenses to prevent water from entering basements, and elevating machinery and electrical equipment.

Hurricane Harvey (2017)

Similar to Katrina — in that its loss severity came from water rather than wind — Harvey demonstrated the importance of flood risk mitigation. Record rainfall during Harvey inundated the Houston area and overwhelmed infrastructure. A majority of Texas residents with damage from this event did not have flood insurance.

The port of Houston experienced smaller cargo losses than in other storms because containers were left stacked. High stacks of shipping containers are more exposed to wind damage, but unstacked containers are more vulnerable to storm surge and flood.

Hurricane Ian (2022)

Ian’s path of destruction across Florida showed that events of the same intensity and storm track do not necessarily produce the same amount of damage. Ian in 2022 and Charley in 2004 both had peak winds of 150 mph and made landfall in the same spot, but the larger and slow-moving Ian wreaked more devastation in the form of storm surge and excess rainfall.

Ian’s total insured losses of $64 billion are second only to Katrina. The need to prepare for severe inland flooding was a major lesson from the storm.