It's clear that 2017 is one of the most active hurricane seasonsin several years, with Tropical Storm Philippe — the 16th namedstorm of the year — crossing South Florida and moving into theBahamas on Oct. 29, the five-year anniversary of Superstorm Sandy.At the same time, the Northeast was facing a Nor'easter, bringingheavy wind gusts and high tides, causing power outages andlocalized flooding.

Superstorm Sandy, which pummeled the Eastern seaboard on Oct.29, 2012, has been rated as one of the deadliest windstorms to haveoccurred in 40 years. Looking back on Sandy's landfall, Allianz GlobalCorporate & Specialty (AGCS) has released a new reporttitled "From Sandy to Maria: Increasingly Destructive'Perfect Storms'."The report analyzes what made Sandy unique,the 2017 Atlantic hurricane season, and what policyholders can doto prepare for the "new normal" of extreme weather events.

AGCS notes that storms represent 40% of natural hazard claims,making them the fifth top cause of loss for businesses. Sandycaused total economic losses of $70 billion, but claims and court cases are ongoing, which mayresult in an increase in the total.

To put Sandy in historical perspective, the storm had rankedbetween Hurricane Katrina with $160 billion in losses and Hurricane Andrew with $48 billion as the second costliest U.S.hurricane. That "record" stood until 2017 when Hurricane Harveystruck in August. Estimates for losses from Harvey are still beingcalculated, but they're estimated to range between $70 billion and$108 billion. Economic losses from Hurricane Irma and HurricaneMaria continue to add up as Puerto Rico, the U.S. Virgin Islands,and other areas struggle with the recovery and restorationprocess.

Impact of rising sea levels

"Extensive data has shown that the global average sea level hasrisen by eight to nine inches, resulting in an increased severityof storm surge along the U.S. coastlines," says Thomas Varney,regional manager for Allianz Risk Consulting in North America. "Thelosses from Sandy and the current storm season clearly illustratethis point."

According to AGCS, the severity of losses from weather events isalready increasing. The average amount paid for extreme events —including windstorms — by insurers between 1980 and 1989 was $15billion a year, but between 2010 and 2013 the average amountclimbed to an average of $70 billion a year.

What made Sandy unique?

Several things coincided to make Sandy into a "superstorm,"wreaking havoc on areas like Manhattan's Financial District thatnever expected to experience flooding. The AGCS report points tothese factors as significant:

•  Sandy hit the New York Metro area during high tide,which dramatically increased the height of the storm surge.
• The full moon also made the storm surge worse, because hightides along the Eastern Seaboard rise about 20% during a full moonphase3.
• Sandy approached the area from the East. This unusual pathmaximized the winds and storm surge directed at the shores of LongIsland, Connecticut and New Jersey.
• Sandy was a slow-moving storm, resulting in more sustaineddamage.
• Sandy was massive in terms of geographic area, with a diameterof gale force winds reaching more than 1,000 miles.

Related: Suit against insurance broker over Superstorm Sandylosses can continue says N.Y. court

A high concrete wall constructed since Superstorm Sandy fiveyears ago was erected to help protect area homes along the beach inthe Belle Harbor neighborhood of the Rockaways, Oct. 12, 2017, inNew York. The walls are supported by 22-foot steel pilings driveninto the ground to withstand storm surge and flooding frompotential future hurricanes. (AP Photo/Kathy Willens)

Preparing for storm surges

One of the biggest loss factors from Sandy was that the stormchanged from a wind event to a high water event, the report notes.Traditional planning for dealing with storms were ineffectiveduring Sandy. For example, in the Ocean Marine area, AGCS pointsout that preparation was focused on unstacking containers andplacing boxes lower, which resulted in more flood losses.

"It is a certainty that as the value of property in coastalareas increases, the financial impact of storm events becomes evenmore substantial. As such, many insureds are paying closerattention to prevention guides in relation to high wind, floodingand storm surge events," says Varney.

Related: 7 tips to speed business insurance recoveries fromHurricane Harvey

As a result of the carrier's experience with Sandy and theissues its clients faced as well as claims for damage, AGCS ishelping all its clients, especially those involved in shipping,prepare for storm surges with the following recommendations:

– Redesign the container layout, raise tarmacs and add drainagesystems.

– Calculate the water accumulation in play at any given port atany time.

– Monitor the National Weather Service's new Storm Surge Watch/Warning Map for Atlantic tropicalcyclones. The new warning system will be issued for alllife-threatening storm surges or flooding that is forecast for theGulf States and East Coast of the U.S.

– Monitor the Federal Emergency Management Agency's (FEMA) revisedflood studies and mapping in the areas affected by Sandy —driven by changes in methodology and political forces —and participate in helping FEMA plan accordingly.

– Develop and maintain a formal flood emergency plan if yourbusiness is located in or close to a flood zone.

– Consider installing emergency generators that can operate aportion, if not all, of the critical equipment if your facilityshould experience a flood loss.

– Depending on the construction and design of your building, useflood gates and flood doors to reduce the amount of flood waterthat enters the building.

– Raise all equipment critical to the operation of yourbuilding, like electrical switchgear, transformers, generators, andfire pumps, to a level above the 1,000-year flood elevation.

Related: The truth about 100-year floods

What about flood insurance?

There is much debate over whether to obtain flood insurance andfrom what source for businesses and residences. As many propertyowners have learned, to their dismay, flooding can occur from heavyrains, not just from hurricanes or other natural disasters. Swollenrivers can overflow, and higher than normal tides can surge fartherinland than expected.

The first thing property owners should do is consult FEMA'sflood maps for the areas in which they have facilities or homes. Asa result of Sandy, flood maps for many locations are under reviewand may be redrawn to include more property within the flood zones.Until updated flood maps are issued for affected areas, AGCS says,existing flood insurance rates are assessed on the prior effectiveFlood Insurance Rate Maps These maps are available on the FEMAwebsite, the report explains, and they outline flood zones andactual heights based on sea level of locations in various floodzones.

Related: In Harvey and Irma's wake agents and brokers needto pay attention to flood insurance reform

Even though your property or facility is not within anofficial flood zone, assessing your risk, obtaining flood insuranceand taking extra precautions will help you survive anothersuperstorm and get back in business faster.

The report is available from the Allianz GlobalCorporate & Specialty website.

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