The 2024 Atlantic hurricane season – the second costliest on record – served as a reminder of the risks posed by natural disasters. In total, 11 hurricanes formed, and five of them became strong enough to be considered major hurricanes. The damage, largely inflicted by Hurricanes Milton and Helene, is estimated to exceed $190 billion. For families in the Carolinas, the damage wrought by Hurricane Helene wasn’t just financial – it left entire neighborhoods underwater, homes uninhabitable, and schools closed indefinitely.

At Gies College of Business, researchers like Tatyana Deryugina are investigating the economic, social, and environmental impacts of natural disasters to better understand how policy changes and pre-disaster investment can strengthen communities against future storms.

“This hurricane season highlighted just how many people face disaster risk, and this is only going to get worse as climate change sets in,” said Deryugina, an associate professor of finance at Gies Business.

The human cost was high: nearly 400 people in the US and the Caribbean lost their lives. Hurricane Helene killed at least 228 people, far exceeding the average death toll for hurricanes in the United States, and the threat of Hurricane Milton resulted in a mandatory evacuation order that displaced nearly 6 million Floridians. Researchers have warned that climate change will put more of the world’s population at risk of natural disaster, as rising sea temperatures and intensifying weather systems complicate disaster preparedness and recovery strategies.

According to Deryugina, finding solutions to these complications will require major change.

“We need to be rethinking our development policies, which over the past decade have put more people in harm’s way,” Deryugina said. “That problem is compounded by many homeowners having inadequate insurance coverage.”

Homeowners living in high-risk areas are finding it more difficult to obtain property coverage as large insurers pull out of high-risk markets. A destabilized insurance market leaves communities vulnerable and poses risks to the larger economy, as banks and lenders rethink their exposure to mortgages in high-risk areas. This shift leaves safety nets and governments to bear an increasing share of recovery costs, a burden that could strain public resources and impede recovery efforts.

For Deryugina, those risks underscore the need for changes that reduce vulnerabilities and build resilience in high-risk areas.

“We need to address these challenges through a combination of policy changes and long-term planning,” she said. “This includes incentivizing climate-resilient development, reforming insurance markets to ensure sustainable and accessible coverage, and investing in cost-effective mitigation strategies such as improved infrastructure and natural barriers.”

As policymakers grapple with how to approach these challenges, research plays a vital role in identifying mitigation strategies that work. Studies by Deryugina and her colleagues explore the short- and long-run health impacts of natural disasters, offering insights that can guide interventions. Deryugina’s research on the long-term effects of Hurricane Katrina revealed that the locations where displaced individuals resettled significantly impacted their health outcomes long after the historic storm made landfall.

These findings from Hurricane Katrina’s aftermath provide further lessons for addressing displacement challenges. Facilitating mobility for individuals facing disaster risk may yield significant long-term benefits. Another study by Deryugina revealed that victims of Katrina who relocated experienced income gains in the longer run. By resettling in areas with stronger labor markets, the displaced were able to rebuild their lives more effectively.

Deryugina’s research proves the importance of local economic conditions and the value of comprehensive policy interventions in mitigating the impacts of natural disasters. While disaster aid provides essential short-term relief, robust pre- and post-disaster investment can significantly reduce the long-term social and economic costs of natural disasters like hurricanes.

“Without such measures, the economic and human toll of hurricanes will continue to grow,” Deryugina said. “That will disproportionately impact vulnerable communities and place an unsustainable burden on disaster recovery systems.”