The hurricane season of 2005, which began in June and lasted until the end of November, broke all previous records in regards to property/casualty insurance damages, far surpassing 2004 that had been the previous record holder.  Losses from catastrophic events of 2004 totaled $27.3 billion.  The insured losses from 2005 almost tripled that number, with a staggering loss of $61.8 billion; while total monetary loss from 2005 far exceeded $100 billion.  Although there were a total of 24 events of 2005, the vast majority of losses were a result of five events: Hurricanes Katrina, Wilma, Rita, Ophelia and Dennis.  These five hurricanes were responsible for $57.7 billion in insured losses (93% of the total damage for the year.) Loss from catastrophic events in a single year had never been so devastating. 

The earliest of these severe hurricanes was Hurricane Dennis, a Category 3 hurricane on the Saffir-Simpson Scale.  Hurricane Dennis made landfall in Cuba before moving into Pensacola, Florida in early July of 2005, where it caused over $1 billion in insured damages, and over $2 billion in total damages.

The second major hurricane, in August of 2005, was by far the most devastating; Hurricane Katrina remains the single most destructive hurricane in American history.  It reached the Category 5 level, the most severe on the Saffir-Simpson scale, over the Gulf of Mexico, but weakened to Category 3 before decimating the central Gulf coastal region, most especially the cities of New Orleans, Mobile, AL and Gulfport MS.  These cities experienced such intense destruction, that they have not yet been able to return to full normalcy.  Hurricane Katrina was responsible for $40.6 billion in insured damages, and double that amount ($81.2 billion) in total monetary loss.

In early September, Hurricane Ophelia formed off the East Coast.  Although this Category 1 hurricane was never credited with official landfall, Ophelia caused coastal beach erosion and minor destruction, especially off the North Carolina coast.  According to the AIR Worldwide Corp., this hurricane caused relatively little damage with less than $800 million in insured damages.

Soon after Hurricanes Katrina and Ophelia, Hurricane Rita struck the Texas/ Louisiana border and ravaged southeastern Texas in late September of 2005.  Hurricane Rita, like her predecessor, Katrina, reached a Category 5 level over the Gulf of Mexico before weakening to a Category 3 landfall on the Texas/ Louisiana border.  Hurricane Rita caused $5 billion in insured damages and doubled that amount ($10 billion) in total losses.

The last major hurricane of 2005 occurred in October.  Hurricane Wilma reached the level of Category 5 over the Atlantic Basin.  Landfall occurred on the Yucatan Peninsula, as the hurricane weakened to Category 3 before striking Florida on the 24th of October.  Hurricane Wilma caused $10.3 billion in insured damages, and, like the others, doubled that amount in terms of total loss with $20.6 billion.

The damage done by these five hurricanes was a massive majority of the total insured damage from hurricanes and storms for 2005, and definitively broke the record set by 2004.

Other natural catastrophes, such as hail and tornadoes although on a much smaller scale, also caused much damage in 2005.  On March 25, 2005, there was a thunderstorm with hail that ranks 8th among the top 20 most costly insurance losses in the world for 2005.  According to Swiss Re. and the ISO, it cost 655 million dollars in insurance damages.  The entire year of hailstorms (which were sometimes combined with other storms such as tornadoes or floods) was responsible for $1.5 billion (or 2.5% of the total for 2005) in insured damages.  Surprisingly, tornadoes were much less destructive than hail in 2005.  Swiss Re. and ISO report that tornadoes only cost $632 million in insurance damages, or 1% total damage for 2005.

After two such eventful years as 2004 and 2005, the next year was relatively peaceful.  AIR Worldwide Corp. reports that although there were many storms and hurricanes predicted and prepared for, there were only 9 named storms and 5 hurricanes.  Of these hurricanes, only two, Gordon and Helene, reached 'major' status as Category 3 on the Saffir-Simpson Scale.

Scientists, such as Peter S. Dailey, Ph.D., who works with AIR Worldwide Corp., believe that the reason for this quiet year was the cold water of the Atlantic.  "In April, an anomalous pool of cooler than average water developed off the eastern seaboard and spread across the Atlantic through most of the summer.  This cooler water served both to prevent storms from forming and to inhibit the ones that did form from intensifying," Dailey states, explaining the correlation between the chill and the lack of storms.  After the dissipation of this pool of water in October, however, hurricanes were still not as active as they had been predicted to be. "The reason," Dailey claims, "postulated with the benefit of hindsite, was the onset of a mild to moderate El Niño event.  El Niño conditions produce elevated SSTs in the tropical Pacific, but translate to increased wind shear in the Atlantic."

In 2006, tornadoes caused much insurance damage, to the amount of $4.02 billion in March and April.  Swiss Re. reports that the most costly natural disaster of 2006 was a tornado on April 13, 2006. This tornado alone cost $1.72 billion in insurance damages.  In this storm, hail was also a component that caused insurance damage, however, it is not possible to get the amount caused the tornado separated from the amount caused by the hail.  There is no information available for November-December 2006 regarding insurance costs of natural disasters. Swiss Re. reports that there were two storms, one in April and one in August of 2006, where hail was a component in insurance costs amounting up to $1.06 billion. 

The events of 2004 and 2005 were enough for scientists to predict an active hurricane season in 2006. This was not the case; 2006, with only 14 events saw the least number of catastrophic disasters in many years.

Sources:

National Climatic Data Center (NCDC)

Insurance Information Institute (III)

AIR Worldwide Corp.