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INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580

Insurers, Government Have Enhanced Their Disaster Response Programs Since 2005

NEW YORK, August 29, 2008 - Hurricane Gustav is making its way this weekend into the Gulf of Mexico and could make landfall early next week in Louisiana, almost three years to the day after Hurricane Katrina hit that state and set into motion events that caused the costliest natural disaster in U.S. history.

Besides the significant loss of life caused by Katrina, the hurricane also generated $41 billion in insured damage. Three years later, private-sector insurers and reinsurers continue to have the financial strength and logistical resources to respond to the most severe natural disasters.

The magnitude of Hurricane Katrina in 2005 triggered a reexamination of how the United States deals with the financial consequences of natural disasters among insurers, reinsurers and public policymakers, which continues today, according to the ÐÓ°ÉÔ­´´ Information Institute (I.I.I.).

ÐÓ°ÉÔ­´´ companies have paid an estimated $41 billion to policyholders on 1.7 million Hurricane Katrina claims for damage to homes, businesses and vehicles in six states. By contrast, Hurricane Andrew in Florida, the previous record holder, resulted in $15.5 billion in losses in 1992 ($22.9 billion in 2007 dollars) and 790,000 claims.

Louisiana ($25.3 billion, 975,000 claims) and Mississippi ($13.6 billion, 515,000 claims) received by far the most insurance claims dollars to aid in their recovery from Katrina.

"While 2005 was by far the worst year ever for insured catastrophe losses in the U.S., future storms could prove even costlier, reaching upwards of $100 billion," said Dr. Robert Hartwig, president of the I.I.I. "Disaster losses along the coast are likely to escalate in the coming years because of huge increases in development, rising rebuilding and repair costs and the expectation for more frequent and more severe storms in hurricane-prone areas."

The total insured value of hurricane exposed coastal property stood at $8.9 trillion as of year-end 2007, up 24 percent, or $1.7 trillion, from 2004, according to AIR Worldwide. Florida and New York have the most insured coastal property, with approximately $2.5 trillion each. Insured coastal exposure in Louisiana, Texas and Mississippi in 2007 stood at $224 billion, $895 billion and $52 billion, respectively.

While some insurers in some coastal states are not writing new homeowners policies, coverage is available in every state, either through private insurers or a state-operated insurance company. Also, insurers continue to provide coverage to their existing policyholders until the completion of the contract period. As a reminder, flood damage is not covered under a standard homeowners insurance policy. Flood insurance is available through the National Flood ÐÓ°ÉÔ­´´ Program ( ).

The I.I.I. has homeowners insurance market share figures for the Gulf Coast states and hurricane fact sheets online at www.iii.org/media/facts/statsbyissue/hurricanefactfiles/.

For more information regarding insurance, go to the I.I.I.'s Web site at .

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.