The Institute found that mitigation efforts to reduce property damage, death, injuries and economic loss from the next Hurricane Andrew have been effective where applied, but their use has been spotty and in some cases their benefit diminished by unwise land use policy.

Hurricane Andrew, the most costly natural disaster in U.S. history, tore into the Bahamas and southern Florida from Aug. 23-24, 1992, and then moved across the Gulf of Mexico to hit parts of Louisiana and other southeastern states Aug. 25-26.

Insured damage in Andrew's wake totaled nearly $16 billion--$20 billion in today's dollars. Since then only the estimated $50 billion in insured losses from the Sept. 11 terrorist attack have been more costly, noted the Institute.

Hurricane Andrew's peak wind gusts of almost 200 m.p.h. destroyed whole communities, demolished thousands of homes and businesses, flattened crops and left mountains of debris.

The Institute called Andrew the greatest claims handling challenge the industry has ever faced, producing 700,000 claims in a path of destruction stretching over thousands of square miles.

The weather catastrophe loss from Andrew not only delivered a stunning financial blow to insurers, but also to the economy of south Florida, which took the severest hit, the Institute noted.

"The immediate financial and market consequences of Andrew for insurers were swift, severe and long lasting," said Robert Hartwig, the Institute's senior vice president and chief economist.

"Numerous smaller insurers became insolvent, and the market for residential and commercial property coverage in coastal areas of the state dried up," he recalled. "Catastrophe reinsurance prices soared and available limits of coverage tumbled. Some Florida subsidiaries of large national insurers required infusions of capital to stay afloat."

The Institute warned that catastrophe modeling firms have estimated that a worst-case scenario event--a Category 5 hurricane striking downtown Miami--could produce insured losses well in excess of $50 billion, making it one of the largest catastrophe risks anywhere in the United States.

While a $50 billion insured loss would produce a staggering blow to insurers, the total economic loss would likely exceed $80 billion, the Institute noted.

According to Mr. Hartwig, efforts to reduce future losses through zoning restrictions or changes in building codes are very valuable, but are often resisted by politically powerful developers and homebuilders as well as real estate interests and proponents of growth.

"Unless more substantive risk-reduction strategies are adopted--such as building moratoria in those areas that are the most vulnerable to hurricane damage--the benefits from mitigation will remain elusive," he said.

The Institute said information on the tenth anniversary of Hurricane Andrew, and the insurance implications, is available on its Web site at: www.iii.org/media/hottopics/hot/hurricane/. Information on mitigation efforts can be obtained from the Institute for Business & Home Safety's Web site at www.ibhs.org.

The Institute is a nonprofit communications organization sponsored by the property-casualty insurance industry.