Remembering Hurricane Andrew's lessons, 30 years later


Authored by AXA XL Global CUO Property Risk Management & CUO Property, Americas, Michele Sansone  

For the powerful storm that it was and the impact it had in changing the insurance industry, building codes, emergency response and more, Hurricane Andrew is memorable, even 30 years later.

Andrew made landfall on August 24, 1992, as just one of four hurricanes ever to make landfall in the U.S. at Category 5 strength. For the longest time, it ranked as one of the most expensive US storms. It still is, but is now surpassed by a few others, including Katrina (2005), Harvey (2017), Maria (2017), Irma (2017), Ida (2021), and Sandy (2012).

Widespread destruction

Andrew and its devastating high winds caused major damage in the Bahamas and Louisiana, but its greatest impact was in South Florida, particularly the community of Homestead where it made landfall. Wind speeds were estimated as high as 165 mph, but the National Hurricane Center in Florida lost monitoring instruments in the storm so unfortunately, no conclusive maximum wind speeds could be determined.

Residential properties took a hard hit. More than 25,500 homes were destroyed; another 101,000 homes were damaged. Commercial property losses were substantial too. Some 59 healthcare facilities, 31 public schools, 82,000 businesses, 3,300 miles of powerlines, 9,500 traffic signs and signals, plus 32,900 acres of farmland were damaged or destroyed. Homestead Hospital, for instance, sustained USD 5 million in property damage and another USD 15 million in business interruption costs, for a total loss of USD 20 million. In total, Andrew cost insurers an estimated USD 25 billion in 1992 dollars.

The damage could have been worse. The hurricane’s eye was well-formed and compact, unlike Hurricane Katrina which cut a much wider swath. In addition, Andrew’s path avoided the more populated areas like Miami and Fort Lauderdale.

According to the Insurance Information Institute, at least 16 insurance companies became insolvent because of their losses from Hurricane Andrew.

Capacity crunch

Hurricane Andrew destroyed more than property. According to the Insurance Information Institute, at least 16 insurance companies became insolvent because of their losses from Hurricane Andrew. Many others fled the Florida home insurance market. The state was forced to create two home insurance pools: the Florida Windstorm Underwriting Association (FWUA), which provided coastal residents with wind-only coverage, and the Florida Residential Property and Casualty Joint Underwriting Association (JUA), which provided comprehensive home insurance to Floridians who couldn't find coverage in the private insurance market. In 2002, the two combined to form Citizen’s Property Insurance Corporation, a not-for-profit, tax-exempt government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market.

After Andrew, commercial CAT capacity in Florida was a little hard to find too. Today, there are specialty insurance companies that are focused on specifically covering wind risks. Since Hurricane Andrew and the many other storms that followed, several hurricane-prone states have initiated wind pools and other insurance facilities similar to those in Florida.

Andrew’s destruction drove a clear message to the whole insurance industry. Insurers and reinsurers realized that, to remain in business, they needed to estimate and manage their natural hazard risk more accurately.

An industry gamechanger

For many of us in the industry, Hurricane Andrew arrived early in our insurance careers. At the time, I was a junior underwriter, just starting out in the industry. While it may be hard to imagine, there was very little use of computers in the industry in the early 1990s. Not all of us had one at our desks. Instead, we relied on yellow carbon copy sheets – three copies, in fact – to write locations and values of commercial risks onto a spread sheet when we were underwriting commercial business.

Liability limits were nowhere near today’s standards. They hovered closer to USD 40 million than the USD 100 million and more than many carriers offer to a single property risk today.

Cat modeling was only in its infancy in the 1990s. Models were rare in the property insurance business and most underwriters did not have access to that data for their day-to-day underwriting activities. Wind speeds were recorded historically, and no Category 5 storm had hit Florida to date.

Even having lived through this era of the property insurance market, it is still sometimes hard to recall how we worked back then, especially given the modeling tools, technology, data, and analytics that we have available to us today, as well as the continuous innovation and advancements we are seeing today.

The next top model

Modeling has advanced considerably. When Andrew hit, cat modeling was just starting to be applied in insurers’ underwriting and capital management efforts. Around the time of Andrew’s arrival, several new modeling firms developed computer software for analyzing the implications of natural hazard risk. (Karen Clark, who founded the first catastrophe modeling company, Applied Insurance Research, which became AIR Worldwide, recently wrote a piece for the Insurance Journal, The Evolution of Catastrophe Modeling Since Hurricane Andrew. It’s worth a read!)

Models change with new data, and as data has been continuously collected, models have continuously changed. Advances in technology and analytics have also transformed the models and the way insureds view and deploy their insurance capital.

More rapid response

AXA XL Risk Consulting’s Property Center of Expertise Leader John A. Frank worked as a loss prevention consultant at the time and happened to be deployed in Louisiana when Andrew blew through. He recalls how he was immediately evacuated to a National Guard facility in central Mississippi before Andrew struck. From there, he helped with claims and clean up processes in Louisiana.

As he and others recall, the devastation to homes, businesses and people was so extensive that there was a rallying cry to improve claims handling services. Specifically, Federal Emergency Management Agency (FEMA) and other aid services came under great scrutiny and criticism. After Andrew, it took four days for FEMA to deploy its teams into South Florida. And given the devastation suffered, four days was way too long. As a result, there were calls for major reforms. Because of Andrew, lessons from other disasters and legislative change, FEMA is in a much better position today to provide help when a natural catastrophe hits.


Advances in technology are allowing federal and local response agencies to employ better communication, quicker response, and speedier recovery. Consider that insurers can now deploy drones to natural disasters to begin assessing damage to areas affected by a natural catastrophe, or to focus on a specific area to inspect rooftops or individual property damage. According to the US Federal Aviation Administration (FAA), there are more than 314,000 commercial drones in the US with about 17% of them used for insurance purposes.

Building better buildings

Quite honestly, no one in the insurance business thought there could be that much damage following any hurricane. Andrew certainly proved us wrong and subsequently built a very strong case for strong building codes, more stringent building inspector training, and attention to property loss prevention.

Although Florida had some of the strictest building codes in the country, following Andrew we discovered that as a result of south Florida’s building boom, building inspectors had not been able to keep up with the new construction. In addition to updated building codes, this discovery also prompted more stringent inspector training, tracking of projects and licensing.

After Hurricane Andrew, one of the first standards Florida adopted was the wind provisions from the American Society of Civil Engineers' standards, which encompasses the national standard for wind requirements. ASCE 7, Minimum Design Loads for Buildings and Other Structures, is an integral part of building codes in the US and is used by all states prone to hurricanes and other natural disasters to evaluate and design commercial buildings.

Today, building codes have been strengthened in most coastal communities throughout the US and continue to benefit from testing and innovation.

Prompting preparedness

A lesson that continues to resonate after most natural disasters is that advance preparation does pay off, thus continuously proving, at least to us in the commercial property insurance industry, to be the most effective strategy for minimizing property losses.

That’s why, since the likes of Andrew, Katrina, Ike, Charley, and so many other named storms, there is much more effort to help communities and businesses prepare for severe windstorms., a website of the Department of Homeland Security, promotes emergency preparedness, putting communities, their residents, and local businesses in touch with emergency preparedness resources, tools, and guidance. Similarly, our Property Risk Engineers help our clients prepare their business facilities to help minimize storm damages.

We’ve learned much from Hurricane Andrew over the last 30 years and have made considerable strides in protecting property. Ever since Andrew’s 1992 landfall, subsequent Nat Cat events have continued to provide more data, lessons, and advancements. While we may never be able to harness Mother Nature, we continuously seek improvements to help our commercial property clients withstand weather’s wrath more effectively than ever before.


About AXA XL

AXA XL is the P&C and specialty risk division of AXA which provides property, casualty, professional and speciality products to industrial, commercial and professional firms, insurance companies and other enterprises, here in the UK and throughout the world. With underwriting teams based in the US, UK, EMEA and Asia Pacific regions, we can make decisions close to the markets you serve and work with you to tailor cover to your business needs.

We help businesses adapt and thrive amidst change. Rather than just paying covered claims when things go wrong, we go beyond protection into prevention so your business can go beyond the unexpected.

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