Twenty years ago on Aug. 24, Hurricane Andrew landed in Floridaand taught the insurance industry lessons it still adheres totoday.

The industry had underestimated the power of Mother Nature andin doing so, felt it was prudent to provide coverage for aninordinate amount of coastal property.

Andrew made insurers completely reassess this philosophy and itgave birth to the catastrophe modeling industry, which wouldgreatly help insurers accurately look at exposures. The Category 5storm nearly collapsed the Florida property insurance market, andtough decisions had to be made in order to sustain availability forproperty owners.

Here’s a look at the devastation Andrew caused 20 years ago,with recollections from some of the industry’s key players.

Andrew caused more than $15 billion in insured losses. Theindustry had predicted a far less expensive worst-case scenario forFlorida based off losses sustained from 1989’s Hurricane Hugo inSouth Carolina, which caused about $4 billion in insuredlosses.

“The industry tended to look at what just happened versus whatcould happen.”

-Karen Clark, CEO of Karen Clark & Co.(founder of what is now AIR Worldwide)

As quoted in Florida Insurance Commissioner During Andrew Remembersthe Storm—and Assesses Its Game-Changing Impact

“There was no industry and no entrepreneurs looking toinvest in us. I challenged everyone for better ideas. I certainlywasn’t married to the ones we wound up going with. But we hadto.”

-Tom Gallagher, Florida insurance commissioner in1992 when Andrew struck, speaking about some of thedifficult decisions made to prevent a collapse of the state’sproperty insurance market.

As quoted in Florida Insurance Commissioner During Andrew Remembersthe Storm—and Assesses Its Game-Changing Impact

“There was nothing higher than your knees—everything wasleveled. Everything was grey and black. There was no green. Thepalm trees had no palms.”

-Tom Gallagher, Florida insurance commissioner in1992, remembering his tour of Andrew’s devastation.

As quoted in Florida Insurance Commissioner During Andrew Remembersthe Storm—and Assesses Its Game-Changing Impact

(AP Photo)

“I remember speaking to one company executive, and he saidhe thought his agents were doing a bang-up job. The premiums werepouring in. Then all of a sudden they were paying out more moneythan they had made the previous 20 years.”

-Gary Kerney, assistant vice president of Verisk’sProperty Claim Services

As quoted in Florida Insurance Commissioner During Andrew Remembersthe Storm—and Assesses Its Game-Changing Impact

Andrew “revealed that Florida’s vulnerability to hurricanes hadbeen seriously underestimated.”

-Lynne McChristian, Florida representative of theInsurance Information Institute.

As quoted in Florida Insurance Commissioner During Andrew Remembersthe Storm—and Assesses Its Game-Changing Impact

(AP Photo/ Lynne Sladky, File)