Discuss Hurricane Katrina Impact on Bermuda and International Essay

Discuss Hurricane Katrina Impact on Bermuda and International Insurance Markets, and Explain How Storm Affected Our Attitudes Towards Insurance - Essay Example Though mired in legal tangles, insurers have paid up a large section of the affected thus mitigating their hardships to some extent. Some of the arguments looks very brazen such as damages caused by breaching of the levees does not come under the category of tornadoes though it is a well known fact that breaching happened due to water surges caused by hurricane Katrina. Under the circumstances the state has to interfere to ameliorate the sufferers of levees breach since they cannot wash their hands off for the breaching. Insurance is described as a precautionary hedging instrument against likely future losses. It is used for managing the possible risks of the future, which may or may not take place. Thus, through insurance, a person buys future happiness and smooth living. According to Oxford Dictionary Insurance is a contract undertaking to provide financial compensation for loss or damage or injury etc., in return for a payment made in advance once or regularly. Though loss of life or injuries cannot be measured in financial terms, still, in this materialistic world it is quantifiable and tries to compensate the potential future loss financially. Today insurance industry is one of the largest industry sectors in the world and is three times the size of the oil industry in terms of revenue generated. The roots of insurance might be traced to Babylonia, where traders were encouraged to assume the risks of the caravan trade through loans that were repaid only after the goods had arrived safely (Hammarabi, 1795 – 50 BC) 1, a practice resembling bottomry, the ancient maritime law where money is lent to a trader at lenders risk. The concept of insurance evolved through the centuries in Europe and later in the United States. Insurance developed rapidly with the growth of British imperialism in the 17th and 18th century 2. The New York fire of 1835 highlighted the need for adequate reserves to meet unexpected large