Equipment Breakdown a Growing Cause of Commercial Property Losses
Equipment breakdown now rivals fire loss in both the frequency and severity of commercial property claims, FM Global said in a press release.
FM Global said equipment breakdown was the cause of 65 of its 232 large-risk (over $3 million) losses, amounting to 28% of losses based on the gross dollar amount, the carrier said in a press release.
“A large number of those equipment breakdown losses last year could have been prevented,” stated Brion Callori, senior vice president of engineering and research for the Johnston, Rhode Island-based carrier. “However, in a booming economy, many companies aren’t necessarily taking their facilities offline for preventive maintenance, often choosing instead an expensive roll of the dice rather than a more conservative bet. Unfortunately, that strategy only works for so long before problems arise that can lead to expensive repairs, decreased revenue and potential market-share loss for companies that can’t fill orders when their equipment breaks.”
Other key findings from the 2018 review of large risk losses include:
- 62 percent of equipment breakdown losses were due to lack of maintenance, accounting for three-quarters of all equipment loss claims paid.
- 25 percent of equipment breakdown losses occurred after repairs were made or during startup.
- Nearly half of all equipment breakdown losses had a significant human element impact or influence.
- Operator training was a factor in 43 percent of equipment losses, highlighting the need for enhanced training and knowledge transfer as the industry sees significant turnover due to demographic changes, the company said.
Callori said during the last five years FM Global has seen increasing numbers of losses from equipment breakdown, especially in the pulp and paper, chemical, electric utility and mining industries.
“Importantly, our analytics tools, based on thousands of location site visits by our loss prevention engineers over many years, continue to accurately predict large losses. While our data also shows those large losses diminish as engineering site visits and client tenure increase, if companies don’t take measures to prevent equipment breakdown, they put their business resilience at risk.”
Later this year, FM Global will expand its industrial control systems service, which will broaden loss prevention engineering, including cyber security, to encompass the software and hardware that controls clients’ industrial systems.
In April 2019, FM Global announced its plan to hire 60 seasoned engineers dedicated to helping clients prevent equipment breakdown-related losses. Once these additional engineers are hired, FM Global will have more than 250 engineers dedicated exclusively to major equipment such as boilers, turbines, generators, transformers, chemical vessels, compressors and pulp and paper processing machines, the carrier said.
American Modern Offering Video Conferences for Claims
American Modern Insurance Group is using video to get closer to its customers.
The carrier announced Tuesday the launch of a new digital technology that allows personal and commercial line policyholders to use a mobile device to virtually connect with their claims adjuster as a means of more quickly resolving claims. Use of the video connection may help avoid the need for a traditional onsite inspection or it may supplement the onsite inspection, the Amelia, Ohio-based carrier said in a press release.
“Today’s customers expect exceptional service,” stated Bob Crowley, vice president of claims field operations for American Modern. He added that customers, in many cases, may resolve their claim in a week or less.
Once a loss has been reported, the customer will receive a text message notification from the claims adjuster with a link that is tailored to the customer’s preference. The link will offer access to download the Livegenic customer portal and the cell phone’s internet browser. Livegenic is a virtual collaboration platform for insurance carriers.
The link will allow the customer to stream video or take snapshots of damage while conversing with the adjuster who can provide real-time guidance to best visualize the damage or loss with the customer’s assistance. The customer can also send video or photos to the adjuster at a later time, which may be useful in locations with weak or no internet connections.
“As we integrate digital solutions into our claims resolution process, it’s important to consider the emotional needs of our customers during what could be one of the most traumatic experiences of their lives,” said Crowley. “The live collaboration component of this technology helps put the adjuster by the customer’s side to foster a more personal connection during such an experience.”
Broadspire Teams Up with Carisk Imaging
Broadspire, a Miami-based subsidiary of Crawford Co. that acts as a third-party administrator for workers’ compensation claims, has formed a partnership with Carisk Imaging.
Carisk will provide imaging and radiology network access, appointment scheduling and billing services for workers’ compensation. Through this partnership, both companies aim to enhance injured workers’ access to quality imaging and implement a higher service level experience for scheduling and billing services, Broadspire said in a press release.
Effective July 1, the program components include combining scheduling, customer service and network access from Carisk Imaging, which is headquartered in Florham Park, New Jersey. The program will be rolling out in New York, New Jersey, Delaware and Maryland initially, with the opportunity to expand to other states moving forward, Broadspire said.
“Carisk’s bundled solution for quality imaging and electronic billing is an advanced solution that we believe will reduce overall cost of care and improve outcomes,” stated Neil Lentine, president of Broadspire Services in the U.S.
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