Hurricane Katrina made its second US landfall on August 29th in southern Plaquemines parish, Louisiana, about 70 miles south-southeast of New Orleans. The storm subsequently swept across Mississippi, Alabama and western Florida. Katrina was a category 4 storm at landfall with sustained winds of 140 miles per hour. The storm weakened slightly on its approach to land and was downgraded from category 5 to category 4.

The insurance industry faces as much as $25 billion in claims from Katrina, according to preliminary assessments. AIR Worldwide Corporation said that insured losses could total $12 billion to $26 billion. Eqecat said damage could range from $9 billion to $16 billion while Risk Management Solutions (RMS) estimated an insured loss at between $10 billion to $25 billion. The Insurance Information Institute (III), meanwhile, predicts the insurance industry payout could range from $12 billion to $25 billion.

The storm killed at least 57 people along the Gulf of Mexico coast and caused severe and widespread damage, according to reports. Katrina cut power to 1.3 million homes and businesses in Louisiana, Mississippi, Alabama and Florida and authorities said it could be two months before electricity is completely restored. In Mississippi, streets and homes were flooded as far as 6 miles inland. Governor Haley Barbour declared a state of emergency and described Katrina's aftermath as “catastrophic.” BBC News said the Mississippi towns of Biloxi and Gulfport were badly hit by Katrina as winds of 135 miles per hour pounded the state's coast.