A recent market update from ICEYE revealed the extent of the damage incurred by the extensive flooding that occurred across the UK Midlands from January 6-8, revealing at least 7,000 impacted buildings. With flooding under the spotlight, Helena Evans (pictured), managing director of Criterion, shared insights into how the peril is impacting high-net-worth insurance customers – and how the insurance industry can step up to support them.
The adjusting firm is noticing that while a lot of the claims it’s seeing are in known flood areas, the levels of rainfall are higher than usual and the water is taking longer to dissipate. “For example,” Evans said, “some of the village greens, even days after the flood, look like the village pond.
“In Leicestershire, the customers have been advising that the speed at which the level of water rose is quicker than they have ever seen before. It would appear that there is more surface run-off water collecting into the streams and culverts that are then unable to cope with the volumes.”
One of the key ways in which managing flooding claims differs from HNW to mainstream customers, is due to the value of the contents with HNW claims, she said. As a result, it is critical to get specialists in to remove and take items off site to protect them from secondary damage. This includes taking early measures to restore the property, to mitigate the costs involved and potentially save an item from requiring replacing.
There can be high value wine collections stored within basements, for example, she said, and therefore arranging the correct experts at this early stage is critical. Offering a bespoke personalised service for HNW clientele is critical and the value of that is amplified, especially during surge events such as a flood.
In such events, there is a lot of work required in the early days assisting the customer, though this starts to calm down once alternative accommodation is arranged, works have started, and everything is on track. However, she said, this does involve multiple touch points throughout the claim to maintain a high level of customer service throughout.
A core challenge in supporting HNW clients during these incidents is that of finding accommodation for any customer during a localised surge event - as there will be a shortage of rental properties. With HNW individuals, Evans said, the challenge will be finding a property of the same size and standard in the same area, that is available to rent. These challenges require a deep understanding of the unique needs of HNW clients.
“There can also be additional costs such as furnishing unfurnished rental properties to the same standard,” she said. “Customers can also have specialist integrated AV equipment, that if undamaged will require removal to enable building works, and there will therefore be additional costs of removing and refitting these items.
“It goes without saying that the rental cost is far higher. Some landlords will also increase their rental prices during a surge event as they are aware of the supply and demand issue, and will only let the properties on a minimum 12-month lease.”
In addition, she said, HNW properties often have indoor swimming pools, which can be an issue during flood claims, where these fill with contaminated water that can also flood into the pump rooms. The cost to drain out and clean the pool and replace any damaged equipment can be considerable.
“Properties often have a building management system controlling the building’s mechanical and electrical systems - if this is damaged and parts are obsolete this can also cause an issue,” she said. “Again, the importance of involving an expert at the early stage is crucial to establish if a repair is possible before incurring the cost of a whole replacement system.”
The role of the broker comes to the fore at the point of a claim and Evans emphasised how good broker relationships are crucial in creating smooth channels of communication during times of distress for HNW clients. These are developed by inviting the broker out on the first visit, she said, and by speaking with the broker initially to discuss the agreed way of communication, whether they would like to manage this with their client or be copied into correspondence.
It's also about keeping them involved throughout the claims process, she said. It is in fact key to developing good relationships with all stakeholders, to ensure that customers receive timely and accurate information, which is essential for managing their expectations and providing high-quality service.