In Puerto Rico, after Irma first caused extensive damage and flash flooding to the north of the island, Maria made landfall just over a week later as a Cat 4 hurricane. Maria was the deadliest hurricane of the 2017 Atlantic season and damaged 80% of buildings in Catano, resulting in power outage for 80% of the country’s network for three to six months. Extreme rainfall in central Puerto Rico caused extreme flash flooding and widespread inundation.

Real Legacy Assurance Company, a group company of Cooperativa de Seguros Múltiples de Puerto Rico, is one of the largest insurance groups in Puerto Rico and the only one with exposure in Puerto Rico as well as the United States Virgin Islands (USVI) and British Virgin Islands (BVI) – two territories that were badly hit by Irma, resulting in damage ratios of 30% and 60% respectively.

Infrastructure and communication damage made it hard for insurers to contact their insureds, employees and stakeholders. Managing the stakeholder dialogue after the hurricanes hit was a key part of Real Legacy’s disaster recovery plan. The events were undoubtedly a “wake up call” for the (re)insurance industry, highlighting the complex interplay between consumer, loss adjuster, regulator, rating agency and reinsurer in the aftermath.

Loss estimates drastically reduced from the originals provided by the major catastrophe modelling companies. Nonetheless, the potential for loss was an inflection point for the industry’s approach to catastrophe risk management.