While four Florida hurricanes in 2004 and the huge Gulf disasters of 2005 were unprecedented, insurers need to prepare for such inevitable anomalies over the long term, actuaries warned during their annual meeting last month.

Actuaries can't anticipate the next surprise, said Sean R. Devlin, chief actuary-Direct Reinsurance for GE Insurance Solutions in Newton, Pa., during the annual meeting of the Casualty Actuarial Society held in Baltimore. "And nine out of 10 surprises are bad," he said.

While actuarial work generally relies on using losses recorded from past events to understand the potential for future losses, panelists noted that some actuarial models already included even worse storms than those that actually occurred in their ultimate scenarios.

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