Twenty years since Katrina: A legacy of risk and resilience

Twenty years since Katrina: A legacy of risk and resilience

Eighty percent of New Orleans, and 134,000 homes in the city, were inundated during Hurricane Katrina. Tracking north close to the east side of New Orleans, Katrina made two landfalls on Monday, August 29, 2005, both at Category 3 strength. 

Recalling the events of 20 years ago, Katrina first made landfall on the southeast Florida coast on August 25, 2005, then moved northwest and rapidly intensified in the warm waters of the Gulf to reach Category 5 strength on August 28, with a distinct ‘eye’ and a minimum central pressure of 902 mb. 

Along with winds reaching 125 miles per hour, and heavy rain of 8-10 inches across eastern Louisiana, Katrina’s large wind field with maximum winds extending 103 miles from its center, delivered storm surge along the Louisiana, Mississippi, and Alabama Gulf coastline. 

Storm surge peaked at a maximum of 30 feet at Biloxi, Mississippi, and had moved up to 12 miles inland. Lake Pontchartrain on New Orleans' northern shore experienced up to 19 feet of surge on its eastern side. Some 53 city levees were breached, including breaches along all the main canals.
 

New Orleans: Battle against water 

For centuries, New Orleans has battled daily against water and relies on many mitigation features to prevent flooding. A low-lying city sitting in a shallow depression formed of river sediment, the average elevation of metropolitan New Orleans is nearly 6 feet (1.8 meters) below sea level. Surrounded by water, the Mississippi River runs through the city, with Lake Pontchartrain to the north, wetlands to the west, Lake Borgne to the east, and miles of low-lying bayou and swamp leading south to the Gulf Coast.

In addition to natural and man-made levees to raise the ground level, by 2005, some 148 drainage pumps were in operation; the first introduced in the 1900s, capable of moving 15 million US gallons of water per minute. 

Navigation canals, such as the Industrial Canal in the early 1920s, link Lake Pontchartrain to the Mississippi. Drainage canals, including the 2.5-mile-long 17th Street Canal, which dates back to the 1850s, form part of an extensive network of levees and flood walls, with over 170 miles of drainage canals. 

A city used to the complexity of embedding resilience, in 1962, the U.S. Army Corps of Engineers outlined a comprehensive plan to prevent flooding from a hypothetical event, the Standard Project Hurricane, similar to a fast-moving Category 3 storm. 

In September 1965, after making landfall as a Category 4 event on the coast southwest of New Orleans, Hurricane Betsy brought 110 miles per hour winds and a storm surge into Lake Pontchartrain, causing multiple levee failures on the main canals and engulfing 164,000 homes in floodwater. Re-evaluation of the plan, much debate, and many changes later, construction to strengthen the city’s levees to sustain a Category 3 hurricane began in 1993, but the works were not completed by 2005.
 

Widespread impact

Katrina impacted an area of 92,000 square miles, mainly across four Gulf Coast states, an area equivalent to the size of Great Britain. For New Orleans, with such a rapid and extensive collapse of canals, levees, and water pumps, many parts of the city were under 15 feet of water (Figure 3). 

Adding to the devastating blow of Katrina, Hurricane Rita also made landfall in Louisiana a few weeks later on September 21, a few hundred miles west of New Orleans, causing additional flooding to areas hit by Katrina with storm surge and excessive rainfall. From 45 damaged bridges to roads, utilities – including 170 drinking water facilities, communications infrastructure with 3 million customer telephone lines damaged, leaking oil refineries and offshore oil platforms, for New Orleans, it took nearly a month just for the floods to drain. 800,000 city residents were displaced, and two years later, around 300,000 residents had returned.

Fatalities and missing people from Katrina range above 2,000; this ‘super-cat’ still ranks as the costliest natural catastrophe, as estimated insured losses adjusted for inflation exceed  $85 billion (assuming conditions similar to 2005 in terms of levee protection). 
 

Learning from Katrina: Understanding a Super Cat

How do you respond to a ‘super cat’? There was a need to understand what contributes to the scale of events such as Katrina, which led to many significant modeling advancements. Examining how post-event loss amplification (PLA) is reflected, Robert Muir-Wood, Auguste Boissonade, and others proposed the ‘super cat’ component, i.e., a cascade of consequences resulting in significant non-linear loss escalation (containment failures including levees and dams, evacuation efforts, systemic economic consequences). 

As a result of the levee failures alone, Katrina’s aftermath led to one of the most significant ‘super cat’ events in history. It was a wake-up call for the (re)insurance industry in terms of what is possible in terms of the magnitude of impact, inclusive of PLA, and sparked interest in understanding what other areas could be prone to Katrina-like events.

Much emphasis was placed on understanding the non-linear impacts of a ‘super cat’, such as when buildings disintegrate under wind or flood loads and create debris that increases the damage to buildings nearby. Other areas included:

•  How damage to infrastructure prevents pumps from operating, limits water availability for fire hoses, and compromises other vital equipment; failure of telecommunications means that timely information does not reach emergency managers; flooded roads and evacuated personnel hinder recovery.
• At low levels of damage, people help their neighbors; at high levels of damage, the community is overwhelmed, unable to rescue each other, and casualties quickly escalate; similarly, community action to mitigate damage or stabilize and prevent deterioration of damage is lost at higher levels of damage.
• Faced with high levels of damage and pollution in the reconstruction process, decisions are made to demolish whole neighborhoods, rather than to repair and save some of the less damaged properties.
• Another aspect of a ‘super cat’ was that New Orleans experienced a slow recovery in terms of the population returning and, consequently, economic activity returning. There has also been evidence of lower economic output, leading to lower insurance exposure, though that had been offset somewhat by inflation/cost of construction increases in recent years. 

Other insights contributing to  modeling innovation included:

• Storm surge topped the list of hazards from Katrina.  New Orleans' defenses were built to withstand a Category 3 event; Katrina was a Category 5 event before weakening to a Category 3, and despite its weakening, it still exhibited storm surge impacts more commonly associated with its larger Category 5 profile. There has been significant investment and improvement in storm surge modeling, particularly the need to model storm surge buildup throughout the entire life cycle of a storm, as opposed to landfall-only. 
• In areas where levees failed, insurance coverage leakage (i.e., water-driven losses being paid out under a wind-only policy) was a major factor in the event. It triggered the need for more robust capabilities to capture this complexity in catastrophe models and to give users the ability to customize these assumptions. 
• While common in other events during this period (e.g., Ivan in 2004), Katrina led to many cases where claims (especially those cases where only slabs or foundations remained) went through litigation to determine the primary driver and attribution of damage (wind vs. water) on the claim. Within the (re)insurance industry, it led to changes in policy wording to make language clearer on covered vs. non-covered causes of loss, as well as claims adjusting. 
   

Learning from Katrina: Importance of Mitigation and Resilience

Since Hurricane Katrina, over $15 billion has been invested in levees, floodwalls, and pumps designed to withstand inland flooding and storm surge. This system, completed in 2011 and known as the Hurricane and Storm Damage Risk Reduction System, is designed to protect against a 100-year surge event. It was put to the test during Hurricane Ida in 2021 (Category 4), and it held, marking a pivotal moment in the story of engineered resilience.

At the heart of this system are two monumental features: the world’s largest pumping station and the “Great Wall of Louisiana.” The pumping station is capable of moving 19,140 cubic feet of water per second, enough to fill an Olympic-size swimming pool in approximately four seconds. Meanwhile, the Great Wall of Louisiana, a 1.8-mile-long storm surge barrier, can be closed during hurricanes to prevent floodwaters from inundating the city.

Does New Orleans offer a blueprint for other areas looking to strengthen resiliency? The lessons from the city’s rebuild, namely improvements in flood defenses and adoption of statewide building codes, require involvement from many players in the industry, from policyholders, insurers, government, and regulators. 

Regulations have strengthened as a result. From the 2006 International Building Code, updates since 2018, and later for both hurricane and flood, to further strengthen and fortify structures against hurricanes, and the Comprehensive Zoning Ordinance (CZO) from 2015 that governs how land is used, and building regulations. 

The past two decades have also seen a revolution in flood risk modeling. Advanced models now simulate both defended and undefended leveed scenarios, incorporating levee height, breach probability, and standard of protection. These capabilities enable more realistic risk assessments and better-informed mitigation strategies.
 

The Ongoing Challenge of Aging Infrastructure

Louisiana tops the U.S. list when it comes to the amount of projected land loss from coastal flooding by 2050 — approximately 9,200 square miles. The state has been well aware of the dangers on its coastline, which has eroded at a rate of about 5,700 acres of wetlands a year between 1974 and 1990, meaning that vulnerability to storm surge and flooding is growing. 

Despite the investment in New Orleans, aging levees remain a national challenge. Over 23 million people in the U.S. live behind levees, which protect more than $2 trillion in property. Yet, the average levee is over 60 years old, often built before modern engineering standards and assuming a stationary environment. As flood risk evolves, many of these systems are being tested in ways they weren’t designed for.
 

Flood Insurance: Are New Orleans Communities Better Protected Today?

Despite the lessons of Hurricane Katrina and the history of catastrophic flooding, flood insurance coverage across Louisiana has seen a significant decline in recent years. In August 2021, there were 508,224 NFIP policies in force across the state. As of July 31, 2025, that number has dropped to 421,448, a reduction of nearly 17%. This downward trend raises concerns about the growing protection gap, especially as flood events are becoming more frequent and severe. The decline reflects a combination of rising premiums, affordability challenges, and shifting perceptions of risk, leaving many residents increasingly vulnerable.
 

Advances in Hurricane and Flood Risk Modeling

Since Katrina, there is no doubt that catastrophe modeling has improved over the last 20 years, helping the (re)insurance market better quantify and manage both hurricane and flood risk. Within the Moody’s RMS North Atlantic Hurricane Models, and the advancements in storm surge modeling and PLA representation outlined earlier, are complemented by improvements in site-specific modeling capabilities. 

There are more fields than ever before to help users reflect location-level building characteristics, including ones that are critical to representing its hurricane wind (e.g., roof age) or water (first floor elevation, foundation type, presence of basements) risk profile accurately. Given how difficult it can be to obtain these details, the models contain inventory and other smart databases to populate many of these details when it’s missing or incomplete. 

Better understanding the risk means you can then understand how to mitigate risk. A major advancement in catastrophe models over the last two decades, including the Moody’s RMS U.S. Inland Flood HD Model, is that they allow for site-specific mitigation. Stakeholders can define the presence of local flood defenses, whether it is a portable barrier protecting a hospital or industrial site, and adjust the standard of protection to reflect real-world conditions. This improves both underwriting accuracy and risk transparency.

Ensuring communities get the resources to start rebuilding is important for a faster recovery and broader access to protection, especially in underserved or high-risk areas. Advances in modeling are also enabling innovative solutions like parametric insurance, where payouts are triggered by modeled wind and/or flood conditions rather than traditional loss assessments. 

If Katrina were to occur again today, it would likely yield lower insured loss impacts due to a combination of increased resilience (flood defenses, better building codes) and negative aspects like fewer people and reduced insurance exposure (Figure 5). 

One insight from our Moody’s RMS North Atlantic Hurricane Models is that although Katrina was the costliest hurricane on record, it does not mean it would be the costliest in a cat model. Several other historical events would cause more loss if they were to occur again today (e.g. 1926 Great Miami Hurricane), not to mention the many other stochastic events in our library representing events that haven’t happened yet, but could. 

On the twentieth anniversary of Hurricane Katrina, we mark the occasion by thinking of those who lost their lives and communities in this tragic event. The disaster underscored the ongoing need for investment in resilience to help communities withstand a dynamic and evolving risk landscape.