The frequency of major disasters in the U.S. has created some ugly scenarios for the insurance industry, according to Donald Light, senior analyst with Celent and author of the report “After Katrina: What Now for the Insurance Industry?”
There were four hurricanes that hit Florida last year, Katrina and Rita this year, and we've yet to reach the end of the current hurricane season, which officially ends Nov. 30. “The overall loss patterns insurance normally looks at are small and frequent–such as automobile accidents–and large and infrequent–such as hurricanes. Do we now have to plan for very large and not infrequent?” he asks.
There are a couple of technology areas Light suggests insurers will need to focus on in the wake of Hurricane Katrina and its aftermath–financial/risk modeling and disaster recovery/business continuity. “These are areas insurance companies are going to have to spend a lot more resources on,” he says.
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