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Two good things about Katrina

Dear Friend,

This week all our thoughts go to the victims and displaced people of the southern United States in the wake of the devastation wreaked by hurricane Katrina.

I sincerely hope that you have accounted for all friends and family from the region.

As the situation slowly stabilises over the next few days and the enormous US federal relief machine slowly swings into action, it’s important to look to two major positives:

Major positive number one — no (re)insurer is likely to fail because of this storm. One of the worst-case disaster scenarios the global industry has feared and planned for many years has happened and we will stand up, clean up and pay up. This is something we should be proud of — what better advert could there be for our often maligned industry?

Major positive number two — this disaster has forced insurance-related issues right to the top of the US political agenda. When Air Force One flew low over New Orleans, the whole dynamic of the situation changed. Building codes, evacuation plans and sea defences are going to be top priority for politicians of all hues for the foreseeable future. Our industry is finally going to get some of its concerns properly listened to by those in office.

Back in 1853 the London Illustrated News observed that New Orleans “has been built upon a site that only the madness of commercial lust could ever have attempted men to occupy”. But the simple fact remains: New Orleans is where it is because it is the gateway to the whole of the mid-west, and let’s not forget — a stronger levée would have saved the city from flooding.

And sitting here in London, barely above sea level and protected by a levée of our own, we can only sit and wonder if we will be the victims of our own “commercial lust” some day.

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