It's hard to believe it's been 25 years. Hurricane Andrew showed me the impact a large-scale disaster could have on the re/insurance industry, and made me re-think my work as an actuary.
When the hurricane hit, I was fresh out of college and working for a European reinsurer as a junior actuary. All the actuaries I ever met were either casualty pricing or reserving actuaries. I, in fact, focused on casualty at school, because I thought it was more challenging. How complex could property ever be! Property wasn't something I knew well. And then Andrew made me rethink my views on property.
A few months after the hurricane, everyone at my company was called into a meeting to tell us we would no longer write reinsurance business in the US. The company had decided to go into runoff. I don't think Andrew was the sole reason why the company went into run-off but it was almost certainly a factor. Andrew was like the straw that broke the camel's back.
All I knew for sure was that I would be out of a job soon and natural catastrophes were a major exposure to re/insurance companies if peak nat cat zones weren't monitored accurately.
Flash forward to 2000, and I had the chance to join Swiss Re's property treaty team as an actuary. I remembered Andrew. And I hesitated. But the head of Swiss Re's US property team convinced me to give property a try, and I thought to myself, 'Why not? If I don't like it, I can always go back to casualty."
Seventeen(!) years later, I still work in the Swiss Re's property treaty team and one of my main responsibilities is to monitor Swiss Re's exposure to natural catastrophes. It's a tad ironic.
Since Andrew, there have been bigger nat cat events, but Andrew was the one that made me understand the impact one event can have on the financial stability of a company, and gave me a lifelong respect for the property line of business.
Category: Climate/natural disasters: Floods/storms