Twenty years ago on Aug. 24, Hurricane Andrew landed in Florida and taught the insurance industry lessons it still adheres to today.

The industry had underestimated the power of Mother Nature and in doing so, felt it was prudent to provide coverage for an inordinate amount of coastal property.

Andrew made insurers completely reassess this philosophy and it gave birth to the catastrophe modeling industry, which would greatly help insurers accurately look at exposures. The Category 5 storm nearly collapsed the Florida property insurance market, and tough decisions had to be made in order to sustain availability for property owners.

Here’s a look at the devastation Andrew caused 20 years ago, with recollections from some of the industry’s key players.

Andrew caused more than $15 billion in insured losses. The industry had predicted a far less expensive worst-case scenario for Florida based off losses sustained from 1989’s Hurricane Hugo in South Carolina, which caused about $4 billion in insured losses.

“The industry tended to look at what just happened versus what could happen.”

-Karen Clark, CEO of Karen Clark & Co. (founder of what is now AIR Worldwide)

As quoted in Florida Insurance Commissioner During Andrew Remembers the Storm—and Assesses Its Game-Changing Impact

“There was no industry and no entrepreneurs looking to invest in us. I challenged everyone for better ideas. I certainly wasn’t married to the ones we wound up going with. But we had to.”

-Tom Gallagher, Florida insurance commissioner in 1992 when Andrew struck, speaking about some of the difficult decisions made to prevent a collapse of the state’s property insurance market.

As quoted in Florida Insurance Commissioner During Andrew Remembers the Storm—and Assesses Its Game-Changing Impact

“There was nothing higher than your knees—everything was leveled. Everything was grey and black. There was no green. The palm trees had no palms.”

-Tom Gallagher, Florida insurance commissioner in 1992, remembering his tour of Andrew’s devastation.

As quoted in Florida Insurance Commissioner During Andrew Remembers the Storm—and Assesses Its Game-Changing Impact

(AP Photo)

“I remember speaking to one company executive, and he said he thought his agents were doing a bang-up job. The premiums were pouring in. Then all of a sudden they were paying out more money than they had made the previous 20 years.”

-Gary Kerney, assistant vice president of Verisk’s Property Claim Services

As quoted in Florida Insurance Commissioner During Andrew Remembers the Storm—and Assesses Its Game-Changing Impact

Andrew “revealed that Florida’s vulnerability to hurricanes had been seriously underestimated.”

-Lynne McChristian, Florida representative of the Insurance Information Institute.

As quoted in Florida Insurance Commissioner During Andrew Remembers the Storm—and Assesses Its Game-Changing Impact

(AP Photo/ Lynne Sladky, File)

Special Reports /

Remembering Hurricane Andrew: 20 Years Later -- Slideshow

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