The insurance industry has always been under the limelight for being involved in questionable practices. Think of it this way, insurance is an agreement between an insurer and the person seeking insurance that in specifies event or loss, the person seeking the insurance will be financially covered. The insurer agrees to this for a small monthly fee known as premium.
In such a scenario it is natural for the insurance company to do everything in their capability to avoid paying the insurance. This is why this concept has always been loathed by many. However, you will be surprised to learn that even the Insurance industry goes through disastrous periods. This is also the primary purpose of this post.
Here Are the 4 Biggest Disasters in the Insurance Industry History (from 1970 to 2020)
1) Hurricane Katrina, 2005
Hurricane Katrina was a Category 5 storm that destroyed the entire eastern parts of the United States. Florida and Louisiana were two states that were the most affected ones. Due to this natural calamity, there was a total loss of $125 billion in the United States. The insurance industry also took a hit of $82.39 billion. The storm surges caused massive damage to the oil rigs in the Gulf of Mexico.
2) Hurricane Maria, 2017
Hurricane Maria was another Category 5 hurricane that devastated Dominica, St Croix, and Puerto Rico in September 2017. This storm first hit the islands of Puerto Rico and caused havoc in the neighboring cities and towns. The winds blowing at 155 mph destroyed houses, unrooted trees, cell towers, and public places. The insurance industry had to incur losses worth $32 billion.
3) Hurricane Sandy, 2012
Hurricane Sandy was one of the most deadly stores every hit the North Atlantic ocean. It destroyed $70 billion worth of property in North-eastern parts of the United States and Canada. The insurance industry took a hit of $30.14 billion. It was a Category 3 Hurricane with winds blowing at 185 km/h. The storm also hit New York City and New York’s five boroughs.
4) September 11, 2001 attacks
Most people are unaware of the fact that the terror attacks on September 11, 2001 cost the United States government $10 billion in infrastructure and property damage. Not to mention, 2,977 deaths and 25,000 people injured.
The insurance industry took care of the damages to the government and public property/life by shedding $25.99 billion. There has never been an incident (caused by a human) where the insurance industry had to cover up for a huge loss to property and lives.
Conclusion
These are the 4 biggest disasters in the insurance industry history. A lot of efforts are being made to mitigate the volume of damage caused by natural calamities like Hurricane. Although, the efforts are made to safeguard the lives of people and not the property. Hence, the insurance industry is always vulnerable.