We are in the middle of July, and Hurricane season is well underway and already active. Eighteen named storms, nine hurricanes, and four major hurricanes are expected this season, which is above average.
The insurance industry is already under strain with an increase in business interruption and other losses from the COVID-19 pandemic. Now insurers must handle hurricane response and management in this already challenging environment. The pandemic situation as no doubt already pushed many insurers’ cat planning down in priorities, and now the season is upon us. States and insureds and insurers will now need to adjust how they respond to hurricanes in our new normal. Insurers will face resource challenges, including the number of available insurance adjusters, as well as social distancing requirements that could make investigation and adjustment of claims difficult following a major storm.
When It’s Time to Execute
This year insurers need to examine all phases of the cat response, including First Notice of Loss (FNOL) intake, adjuster response, and damage inspections, inspection processing and claim settlements, follow-up, and repair verification through the lens of our new normal.
FNOL intake will likely need to be handled by a workforce working from home. Insurers need to be prepared to set customer expectations and be ready to answer questions around their response as their insureds also navigate the new normal caused by COVID-19. Insurers have been further impacted by travel restrictions that are currently in place. Some hotels have been closed and may remain closed throughout the U.S. Some states are forcing travelers flying into or traveling by car into their states to self-isolate. These travel restrictions create challenges for using out-of-state adjusters.
Many insurers have already been moving to digital claims solutions – and others now have fast-tracked digital projects to deal with claims during the coronavirus pandemic. Insurers can assist their cat response by utilizing new technologies like aerial imagery and geographic information systems to take pictures of properties across the U.S. before and after hurricanes. Replacing manual field assessments with automated assessments carried out by video can also boost efficiency, reduce costs, and turnaround times. However, key in today’s environment, they can lower risks for the insureds and the insurers’ staff.
Once the Storm Passes
There is always continued activity after a storm, which varies by the size and impact of the event. In some instances, the cat handling for open claims can take months or even years to wrap up. With the new challenges and unknowns of this season, two things that should happen after the storm:
- First, to improve your plan for the next event, gather your key team members to discuss the experiences throughout the storm. Outline situations faced that were not covered in the cat response plan and propose solutions for future events.
- Second, post-event, there should be a multi-purposed and multi-phased initiative to gather information from policyholders’ experiences, after the damages are settled, to confirm if covered repairs were made. Making sure the indemnification was used as intended is crucial for current policyholders.
This hurricane season will be a challenging one for many insurers – with possibly delayed planning, social distancing as part of the response and taking care of policyholders that have already had a rough year. Utilizing a strategic partner to help manage cat events can help to create a streamlined experience for insureds, ease the workload on an insurer’s workforce, and deliver needed technology.
Matt Piaseczny is vice president of insurance operations at Xceedance.