The one-year anniversary of Hurricane Sandy may mark an appropriate time to review how the insurance industry reacted to this disaster and the lessons we can draw from that. As a former insurance superintendent in New York, my view of Sandy and its aftermath is colored by the memory of the work I did in that office trying to get both consumers and the industry ready for the big one sure to come.

Executive Summary

On the one-year anniversary of Hurricane Sandy, Deloitte's Howard Mills reviews the industry's response to the disaster and the lessons learned—chief among them the need for insurers to continue educating consumers, businesses and government on how to prepare for natural disasters.

There were some failures. Despite numerous consumer education campaigns, the take-up on federal flood insurance was and remains frighteningly low, and price changes due to Biggert-Waters will only make that worse.

On the commercial side, if news media reports were accurate, many small-business proprietors were unaware of the difference between business interruption insurance and contingent business interruption insurance. For agents, brokers and the industry as a whole, this may provide an opportunity for education on this important topic. It may also open the door to discussion of other coverages, such as terrorism coverage, where the take-up rate has remained stuck in the low 60s even while affordable products offer protection against this difficult-to-defend-against threat.

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