Sandy is a storm that will live in infamy. Though not yet considered the costliest (or the deadliest, thank goodness) of U.S. natural disasters, the hurricane-turned-cyclone delivered an economic sucker punch to millions of businesses and households, causing widespread power outages and a swath of massive flooding- and wind-related damages.

The “superstorm” also generated a staggering number of P&C claims, including more than 230,000 auto losses, as well as immediate, multifaceted logistical challenges to catastrophe adjusters, some of whom reported spending 2 hours a day in gas station lines to refuel at the height of the post-storm chaos (and immediately after losing all their earthly possessions).

Longterm challenges include reigniting the contentious debate about wind versus water losses, and as is often the case with a disaster of this magnitude, a crop of lawsuits and bad press about insurers. It will be interesting to see what role technology and atmospheric computer models will play in assessing the root cause of property damages. One forensic meteorologist explained to me recently that certain hurricane models are able to determine what the sustained wind speeds and gusts were every 15 minutes during the course of a storm at a specific loss address.

In any case, the sheer volume of claims originating from such densely populated areas will mean that even low-severity wind damage claims will present their own special brand of complexities. Karen Clark & Co., a catastrophe risk modeling and management firm, predicted in late November that insured wind-related losses from Sandy would add up to $12 billion, placing the superstorm among the “top five costliest hurricanes in U.S. history.” Absent from that total are those other insured losses, such as business interruption claims.

Clark's team observed that about 25 percent of shoreline properties suffered at least minor damage during Sandy. Moreover, it said a “significant percentage” of those structures would likely require entire roof replacements. (This is to say nothing of matching issues when replacing only a portion of an affected roof is justified). Oy vey!

While there is no glossing over the fact that this holiday season will be somber for many, such devastation will challenge businesses and people to endure and find gratitude. I hope the stories of our own editors and claims adjusters in this month's cover story will resonate with you. I also hope you will find shelter amongst friends and family and, in the words of Charles Dickens, have a “kind, forgiving, charitable and pleasant” holiday season.

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