It's the sad tale of insurance that incredible pain and misfortune have defined the industry. But out of that suffering have come better ways for carriers to do business and ease the burdens of their policyholders. Events such as 9/11 and hurricanes Andrew and Katrina have a place in insurance history books because they taught carriers new things about exposures and risks, particularly the value of geographic information systems (GIS).

The first significant milestone for GIS came in the wake of Hurricane Andrew in 1992, believes Gail McGiffin, a partner with Accenture responsible for underwriting solutions. "[Insurers] realized they had much greater accountability to manage their exposure accumulation across the organization and protect surplus," she says. "[Catastrophe modeling] became a mandate from the board of directors for most insurance carriers."

The next step, McGiffin explains, came in the aftermath of 9/11, when two things happened. One, it became more important to understand a company's accumulation of risk in a four-wall structure, not just in a ZIP code, county, or state. Also, carriers needed to be able to model loss scenarios beyond just property risk because multiple lines of business were activated in that event.