Jeff Waters (pictured) is senior manager and meteorologist at catastrophe modeler Risk Management Solutions.
Superstorm Sandy is the second costliest landfalling U.S. storm on record, and ranks as one of the most destructive events in U.S. history. The storm, which was almost the size of Alaska, brought hurricane-force winds, rain, and catastrophic storm surge to the Mid-Atlantic and Northeast, in addition to significant snowfall to parts of Appalachia and the Midwest. Thousands of flights were cancelled, and power outages that were reported in 15 states impacted almost 8.5 million homeowners and businesses, and caused severe business interruption and contingent business interruption.
Sandy, like Hurricane Katrina and Hurricane Ike before it, have emphasized the potential risk that coastal flooding poses to the insurance industry. It drives the majority of U.S. flood tail risk, which impacts key risk management and rate filing decisions, from capital management to risk transfer. These storms have also highlighted that surge-driven damage can drive a large proportion of the total insured losses – sometimes exceeding the wind damage losses. Sandy's greatest damage impact was from coastal flooding, which accounted for 65 percent of Sandy's total insured losses.
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