When a hurricane strikes, speed is paramount for insurance

When a hurricane strikes, speed is paramount for insurance | Insurance Business

When a hurricane strikes, speed is paramount for insurance

The North Atlantic hurricane season looks set to kick off with a bang. As of Thursday afternoon (July 11), Tropical Storm Barry was barrelling towards Louisiana with the likely prospect of smashing into the Gulf Coast as a hurricane on Saturday.

A number of major offshore oil and natural gas production companies, including huge names like Chevron Corp, BP Plc, and Exxon Mobil Corp. have already started evacuating offshore personnel. Jim Rouiller, chief meteorologist at the Energy Weather Group, told Bloomberg: “The first impact is to the rigs and platforms, then the second risk shows up on Friday and Saturday to the refinery areas. The thing that’s going to be really worrisome is the amount of flooding rains across Louisiana. I think the worst is yet to come.”

Chuck Watson, a disaster modeler with Enki Research in Savannah, Georgia, said that based on its current track, the storm will likely cause about $800 million to $900 million in damage, a figure that could balloon to more like $3.2 billion if flooding overwhelms New Orleans. Needless to say, it’s going to be a long weekend for insurers with business down South.

When it comes to responding to a hurricane event, “speed is of critical importance,” explained Monique McQueen, assistant vice president, catastrophe claims, QBE North America. Anything that insurance companies can do to prepare catastrophe-exposed clients pre-event and then expedite the claims process post-event will improve the client’s experience and reduce insured losses in the long-run.

“One of the biggest lessons we learned from the active hurricane seasons in 2017 and 2018 was the importance of proactive messaging,” McQueen told Insurance Business. “The more we can reach customers ahead of time to help them get prepared and stay weather aware, the more time we can cut on the back end of the claims process because our customers know what to expect, they know how to prepare, and they know how to reach us if a hurricane passes through their area.”

When a hurricane strikes, the insurance industry is hit with an equivalent storm of demands from policyholders. All of a sudden, there’s a huge need for adjuster boots on the ground, and oftentimes the manpower is lacking. To alleviate this issue, QBE North America has set up a virtual adjusting program, through which policyholders with low to moderate damages can receive a virtual loss assessment from a QBE expert in a distant office.

“Our virtual adjusting tool has cut our average loss estimating time by up to 40%. We started piloting it last year, and it has really helped to speed up the claims process,” said Monique. “It also enables us to talk through the claims process with the insured in real time and give them a greater sense of control. If we’re looking at water penetration post-hurricane, the policyholder can show us where the water first entered the building and we can follow the path of the loss right there and then.”

If Tropical Storm Barry becomes the hurricane meteorologists are expecting, there will likely be some major flood losses, especially in the New Orleans area. When major losses occur, this is where loss adjusters are most needed on the ground. QBE’s virtual adjusting program really comes into its own during these large events where the frequency of claims explodes and there’s a huge bottleneck of minor to moderate losses, explained McQueen.