While 2018 was an active hurricane season, it wasn’t quite as bad as some years past. According to the Insurance Information Institute, the 2017 Atlantic hurricane season broke several records, with six reaching Category 3 or stronger. In addition, it was the first time that three Category 4 hurricanes made landfall in the U.S.
According to Wesley Todd, CEO of CaseGlide, the latest hurricane season revealed how insurers continue to improve claims handling and customer service using technology.
“How we managed claims back during Katrina and during the ’04, ’05 storms and then you think about today – you really wouldn’t recognize, not only the industry, but your typical policy owner’s expectations. I started my career as an insurance defense attorney and the first things that came across my desk were those ’05, ’06 hurricane claims. You’d look at these claims files and you’d see communication so slow you’d be pulling your hair out today. The communication with the insurers was done solely by sending letters and then trying to make phone calls and not being able to reach each other,” said Todd.
An emphasis on using multiple platforms to reach out to policyholders has reduced claims cycle times and improved customer service.
“If an insurer tried to handle one claim today like they handled the Wilma claims or the Katrina claims, you’d see a lawsuit before you even got the first letter out,” Todd added.
A recent J.D. Power survey highlighted the high marks insurers received after hurricanes Florence and Michael. Nearly 87 percent of customers surveyed in the four states affected by the storms – North Carolina, South Carolina, Florida and Georgia – said their insurer met or exceeded expectations in their hurricane response efforts.
According to Todd, there continue to be issues that are identified during storms and will need to be addressed by insurers. For example, during Hurricane Michael, there were complaints that arose due to a WiFi and cellular outage that caused a roadblock for insurers trying to assist policyholders.
Drones to inspect properties and virtual claims adjusting applications were just two examples of insurtech in use during hurricane response.
“It’s just awesome stories about insurers being able to rapidly inspect properties and skip so many steps in the process,” said Todd. “You see the house was destroyed, you issue a check. And then all of us, interestingly enough, had satellite imagery. I think it was NOAA that was publishing the ability to zoom in wherever you wanted to after Hurricane Michael on the panhandle. So, if you didn’t have a drone you were able to still sit at a desk and see a total loss and get that thing paid.”
Todd said the aggregation of social media data is also becoming a part of the reporting chain.
“We have clients who have… a dashboard that intakes all social media channels and treats them as if they were a phone call or a letter. That’s so important to be able to meet your customer where your customer is,” Todd said. “A lot of these companies in Michael and Florence were able to really deploy these things because they had the opportunity to test them in Harvey and Irma just a year prior.”
The latest hurricane season continued to accentuate the flood insurance gap.
“It’s one of those situations where a market need is not being met and, not surprisingly, it’s as a result of government involvement,” Todd said. “I’m not sure what’s driving this engine, but I know its impact and you’re seeing so much flooding after these hurricanes in areas that aren’t flood designated or areas that are right next to flood designation.”
Todd cited Mexico Beach, Fla., as an example.
“In Mexico Beach, in the panhandle which was right in the path of Hurricane Michael, I’m hearing that there was a steep grade from the water to the residential area where it went up something like 15 to 25 feet over the course of maybe 50 yards,” Todd said. “So, you had homes sitting there in the middle of the ocean, basically, give or take 25, 50 yards, and they didn’t need to have flood coverage even though they were just steps away from a massive ocean that sometimes, as we see, operates as a gas tank for a hurricane.”
The good news, he said, is that the private flood insurance market is developing.
“The flood insurance problem is having as big of an impact as anything in the industry and maybe even, arguably, as big of an impact as everything else in the industry combined,” he added.
Overall, the 2018 hurricane season was a much better year in terms of total incurred losses.
“I think that it’s one of those things in insurance where nobody’s a genius here. It just happens to be that these hurricanes hit different areas,” said Todd. “Irma just covered the entire state of Florida where virtually the largest portion of the risk in the world for property and casualty. Florence and Michael simply did not hit an area that populated. One of my takeaways on 2018 is technology is really starting to level the playing field.”
It doesn’t matter the size of the insurer, all companies have an opportunity to gain benefits from insurtech, he said.
“It’s so exciting to see that any size insurer can provide better customer service than even the largest insurers,” said Todd. “We have that leveling of the playing field because of drones, because of virtual adjusting apps, because of satellite imagery and because of the instantaneous ability to communicate with policyholders via social media.”
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