Hurricane Katrina: Ten Years Later A Look Back at the Costliest Hurricane in U.S. History Hurricane Katrina was the costliest natural disaster in U.S. history. Forming over the Bahamas on August 23, 2005, the storm made landfall and moved across southern Florida on August 25 as a Category 1 hurricane, before rapidly gaining strength in the Gulf of Mexico.

TS

Aug 30

Category

Wind Speed (mph)

5

157

4

130

3

111

2

96

1

74

Tropical Storm

39

TS

Katrina then made its second U.S. landfall as a Category 3 storm on the morning of August 29, 2005, in southeast Louisiana, creating a path of destruction that affected six states, with Louisiana and Mississippi the hardest-hit.

1 2 3 4

The hurricane caused widespread wind and flood damage, exposing many weaknesses in the region’s infrastructure, as well as the nation’s preparedness for megadisasters.

5

2 4

1

3

TS

Aug 23

About 1,800 people lost their lives as a result of Hurricane Katrina.

The storm’s path, August 23‑30, 2005

Economic Impact:

Katrina in Dollars and Cents Total Economic Losses

Total 2005 Insured Catastrophe Losses in the U.S

Total Insured Losses for Hurricane Katrina

$125 bil

in 2005 dollars ($153 bil in 2015 dollars) – the highest annual insured catastrophe loss tally ever

$61.9 bil

$41.1 bil

Source: Munich Re.

Source: Property Claim Services (PCS), a Verisk Analytics Business.

Percentage of Insured Losses by State ($bil, inflation adjusted for 2015)

Total National Flood Insurance Program Losses for Hurricane Katrina Number of paid losses

Louisiana

Mississippi

Alabama

Florida

Tennessee

Georgia

60% $31.0

33% $16.8

3% $1.4

2% $0.9

1% $0.7

1% $0.4

Source: Property Claim Services (PCS), a Verisk Analytics Business. Excludes flood losses paid by the NFIP. State icons by Maria Darron from The Noun Project.

Amount paid Avg paid loss

167,969 $16.3 bil $97,133

Source: National Flood Insurance Program (NFIP).

Insurance Claims by Coverage and State* Total Losses and Claims by Line of Insurance Claims

Losses (in billions)

1.2 mil

$17.9

346,200

$2.2

156,600

$21.1

1.7 mil

$41.2**

Personal Property (homes & their contents)

Vehicles

Business

Total *Excluding flood claims. **Total based on rounding. Source: Property Claim Services (PCS), a Verisk Analytics Business.

Hurricane Katrina Claims by State Georgia 7,800 0.4%

Florida 122,000 7.0%

Mississippi 515,000 29.5%

Louisiana 975,000 55.9%

Alabama 109,000 6.3% Tennessee 15,000 0.9%

Source: Property Claim Services (PCS), a Verisk Analytics Business.

56% of the more than 1.7 mil Nearly

Hurricane Katrina insurance claims were in Louisiana.

> 29% were in Mississippi.

Other Sources of Hurricane Katrina Recovery Funds:

Public and private outlays to help the Gulf Coast rebuild and rebound Government U.S. Congress designated more than $120 bil for relief programs for the victims of Hurricane Katrina:

Rebuilding & Infrastructure

People & Housing

The Federal Emergency Management Agency (FEMA) provided

The Individuals and Households

$19.6 bil

Program received to be used as housing assistance for rent, repairs and housing replacement (including furniture, clothing and replacement vehicles).

to Louisiana’s communities to rebuild infrastructure and fortify properties and structures against future hazards.

$5.8 bil

Health Care

$2 bil

Approximately of the remaining funds was allocated by the federal government for Medicaid and other health care needs.

92,000

More than households were also housed in FEMA temporary housing. Source: FEMA.

Private/Charities

Red Cross Donations

$2.2 bil

in funds were raised by the American Red Cross and affiliated relief organizations.

Foundations & Corporations

Insurance Industry

Charitable foundations and corporations

The insurance industry contributed

$1.3 bil

donated more than in monetary donations and goods to those affected by Hurricane Katrina and Hurricane Rita (which struck the Gulf Coast less than four weeks later). A study by the Foundation Center reveals that the overwhelming majority of these donations occurred within 16 months of the storms.

Sources: The Red Cross; the Chronicles of Philanthropy; Insurance Information Institute Impact magazine.

$70 mil

more than to relief organizations, while volunteers from insurance businesses contributed countless hours assisting relief efforts and giving aid to families affected by Hurricane Katrina.

Where Are We Now?

Katrina +10: Lessons Learned and Opportunities Lost Flood Insurance: Awareness–what’s covered; what’s not? Insurance Information Institute Pulse Poll: Home Insurance “Does your homeowners policy cover damage from flooding during a hurricane?”

Yes 24%

No 56%

Don’t know 19%

56%

A majority of homeowners–more than – are aware that their homeowners insurance does NOT cover damage due to flooding— however, a large segment of respondents

43%

) either believed that their (just over homeowners policy covered floods, or did not know the answer.

Growing Coastal Exposure by State

Even as awareness of flooding due to coastal storms rises, so, too, does the population and value of coastal properties. Population in Coastal Regions by State (mil)

Georgia

0.47

0.5

0.27

0.2

14.03

0

2,000

9.0

2004

1,973.4

1,000

0.0 1960 2008

0

0.59

120

0.4

60.6 44.7

40 20 0

2004

2012

293.5

300

1.19

1.43 200

209.3

0.36

80

2004

2012

118.2

0

0

2004

2012

Sources: U.S. Census Bureau; AIR Worldwide.

New Orleans Population

40

0.1 0.0 1960 2008

0.0 1960 2008

75.9

0.3 0.2

100

0.5

3.0

0.5

0.19

2.0 1.5

80

1.0

3.88

0.6

Louisiana

Insured Value of Gulf and Eastern Seaboard Properties ($bil) 60

0.0 1960 2008

2012

2,862.3

3,000

12.0

0.35

0.1

20

15.0

0.4 0.3

40

0.0 1960 2008

Alabama

Mississippi

60

0.1

6.0

Population in Coastal Regions by State (mil)

73.0

80

0.2

Florida

106.7

120 100

0.4 0.3

Insured Value of Gulf and Eastern Seaboard Properties ($bil)

2004

The Nature of the Risk

2012

The Crescent City: Rebounding, but not out of harm’s way Flooding and damage after Katrina forced a mass exodus, as the city’s population fell by

> 50%.

People have steadily returned, with the

84%

population growing between 2006 and 2014, including

11% since 2010.

Orleans Parish Population (000s) by Year

The entire coastline of the eastern seaboard and Gulf Coast states sits less than

10 feet above sea level,

making these areas more vulnerable to the effects of sea level rise—and flooding generated by hurricane caused storm surge. Additionally, growing population in coastal areas has led to the type of development (and its impact on environmentally sensitive areas) that further increases the risk of storm surge. Source: National Oceanic and Atmospheric Administration (NOAA).

2004

46 1 .702

2005

454.845

2006

208.653

2007

288. 1 1 3

2008

336.644

2009

354.883

20 1 0

3 47.800

20 1 1

360.34 1

2012

369.250

2013

378.7 1 5

2014

384.320

Growth since lowest population Since 2010 Source: U.S. Census Bureau.

84% 1 1%

Takeaways Hurricane Katrina demonstrated the vital role insurance and reinsurance play in helping individuals and businesses recover from the devastating effects of disasters.

To date, the total value of claims paid by private insurance companies and the federal government’s National Flood Insurance Program (NFIP) has amounted

Meanwhile, the population living in hurricane-exposed states and the total value of insured coastal exposure nationwide continues to grow.

$57 bil

to more than (over $70 bil in 2015 dollars).

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Disaster losses along the coast are predicted to escalate in the coming years, as the number of people in harm’s way and the value of properties and businesses at risk continue to increase.