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While the estimates and analysis may slightly differ, many experts agree that the financial impacts of mega-catastrophes in the United States and around the world are growing at an alarming rate.

Economic impacts of catastrophes: The 2005 hurricane season was the busiest since record-keeping began in 1851 with 27 named storms, six more than in 1933. Fifteen were hurricanes. It was also the most costly year on record for the insurance industry with insured losses from Hurricane Katrina at $38.1 billion and total catastrophe losses for the year at $57.7 billion.

The magnitude of the damage caused by Katrina and the potential damage Rita and Wilma might have caused had they not weakened from intense Category 5 hurricanes has triggered a reexamination, not just among insurers and reinsurers but also among public policy and political leaders, of how the United States deals with the financial consequences of such massive property damage and personal loss. Disaster losses along the coast are likely to escalate in the coming years because of huge increases in development. One catastrophe modeling company predicts that catastrophe losses will double every decade of so due to higher residential and commercial density and more expensive buildings.*

http://www.iii.org/media/hottopics/insurance/xxx/

*Source: Insurance Information Institute

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