When Hurricane Katrina slammed into New Orleans in August 2005, causing greater insurance losses than any other natural disaster in history, it became clear that a lot of the city’s flood protection engineering — walls, pumps, levees — had failed.
Something else failed, too: Insurers’ catastrophe models.
The models at the time overestimated the strength of the levees. They also underestimated the exposure of commercial properties. And they didn’t fully account for storm surge. It was the storm surge — amplified by huge wind-driven waves — that drowned New Orleans.
“Katrina was a very tricky