The Bottom Line

Hurricanes are among the most destructive natural disasters that regularly affect the United States. As people concentrate more and more of the nation's wealth in coastal areas subject to hurricanes, property losses and human suffering can only increase.

Property/casualty insurance companies bear much of the cost of any catastrophic storm. Therefore, the insurance industry — in partnership with businesses in other industries, as well as government and nonprofit organizations — is taking innovative steps to reduce losses from hurricanes and to manage the risk that remains.

Geographic information systems and computer modeling technologies offer significant benefits for insurers. And instruments for securitizing catastrophe risk have the potential to provide vast amounts of capital to finance catastrophe risk in the coming century. 

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