Moody's has said that Hurricane Katrina poses ten major challenges to the property and casualty insurance industry's loss estimation process.
These characteristics could make Katrina relatively more costly for insurers than their recent experiences with Florida hurricanes might suggest. The ten unusual characteristics of Katrina are:
1: Widespread flooding in New Orleans will create conflict in claims process;
2: Automobile claims will be higher than in other storms;
3: Adjusters have few options for accommodations; and can't access large areas;
4: Catastrophe model estimates vary widely; few urban floods in dataset;
5: Significant damage to New Orleans infrastructure - costly and a hindrance;
6: Direct and contingent business interruption may be severe; insured portion uncertain;
7: Rise in rebuilding costs (demand surge) from supply/demand imbalance;
8: Environmental claims may arise as clean-up occurs;
9: Possibility for disputes with reinsurers; and
10: Residual pools in Louisiana and Mississippi less developed than Florida's.
