The Perfect Storm: As CAT Season Heats Up, Are You Prepared?

By MaryBeth Fischer | July 2, 2018

Anyone involved with disaster response knows to expect the unexpected, and that mantra has only intensified as 2018’s catastrophe (CAT) season heats up. Unexpected seems to be the theme.

Oklahoma — which typically sees about 13 tornados in the month of April alone — didn’t confirm any tornados this year until May. California — which historically experiences a major earthquake once every 150 years — has now gone 151 years without one. Hawaii residents — who have co-existed with Kilauea for years — were forced to flee from increased lava flow, volcanic fissures and resulting earthquakes. Meanwhile, experts predict that the 2018 hurricane season could be just as destructive as last year’s with 14 named storms.

Though no one can predict exactly when disaster is going to strike, it is our industry’s responsibility to be as prepared as we can be for the unexpected. After all, it is in these challenging times the industry is called upon to deliver on our promises and assist our customers in getting back on their feet.

Disasters always have one thing in common: uncertainty. Properties are destroyed, belongings are lost and families are displaced, turning people’s lives upside down and throwing them into a state of chaos. During these life-altering times, people turn to insurers for support, stability and hope. Does your organization have the right staff and strategies in place to deliver that hope?

Even though some companies might be able to push through the upcoming CAT season with their current staffs, that likely entails numerous night shifts, extended work schedules and the exchange of hundreds of phone calls and emails, resulting in compromised customer service. Will your team be able to provide quick, efficient customer service to match your insureds’ sense of urgency and respond to massive volcanic activity, a tornado, a hurricane or other natural disasters this year? What about five years from now? How about in 2025?

Reassess Your CAT Strategies

Hiring and training must remain a top priority. Mass retirements and the resulting knowledge gap is today’s talent reality. According to the U.S. Bureau of Labor Statistics, the median age of insurance professionals is 45. Many of today’s claims professionals will likely be retiring in the near future. As a result, the tenured members of the claims staff you are relying on for this year’s CAT season may not be there next year or at some point in the not-so-distant future.

It is also vital that your company leverages the most up-to-date technology for CAT season. Through technological innovation, many of the historical disaster claims and adjustment processes have been drastically improved and streamlined. New mobile technology, such as live aerial views and minute-by-minute updates from satellite images, aligns with modern customer demands. Meanwhile, it also reduces the need to deploy dozens of adjusters to impacted areas for inspections. Traditional claims professionals are now expected to develop and manipulate technology to better meet policyholders’ expectations.

With these advancements also comes great opportunity for our industry. The new technology allows insurers to efficiently utilize their resources to make an unthinkable situation less painful for devastated customers. It also means claims professionals will often be interacting with customers in the very moments they are faced with their new overwhelming reality. Insurers have the opportunity to deliver exceptional customer service by retraining claims professionals, especially adjusters, on the human element of the claims process. For example, claims adjusters can be trained as grief counselors to comfort policyholders who may be viewing their damaged properties for the first time through the company’s live updates. Insurers and their staffs must be both adequately trained and resourced to support their policyholders’ needs during these life-altering events.

Revive Cyclical Training

Organizations should also consider reviving the cyclical training programs of the past. Strong cross-departmental training programs have fallen by the wayside since the widespread budget cuts of the last recession. Many insurers have continued to manage with thin budgets and are met with challenges during disasters. There has been talk about resuming those training programs.

In addition to continuing current training courses and certifications for claims professionals, insurance organizations should establish and implement training programs across departments.

Rotating new hires through departments gives them a holistic view of the company and the industry. This cross-training can double as a component of disaster preparation by grooming professionals to assist in different functions, such as claims or customer service.

Employees who are equipped with appropriate skills, regardless of their original job responsibilities, can leverage occupational flexibility and lessen the burden brought by CAT season.

Refine Your Staff

The industry’s growing retirement rate, widening knowledge gap and resulting candidate’s market means many positions held by long-tenured professionals will continue to become vacant. There is undoubtedly a cost to vacancy.

In preparing for CAT season, many organizations are developing relationships with staffing firms in order to quickly react during disasters by augmenting internal resources. It is important to re-evaluate current partners and discuss any necessary service improvements now.

Consider partnering with a boutique staffing firm for unique access to a database of professionals, who possess the insurance experience and applicable licenses necessary to hit the ground running when disaster strikes. Insurance-specific staffing firms can provide a multitude of temporary professionals who are prepared to make an immediate impact. When the time comes for your aging claims professionals to retire, partnerships with these staffing firms will be more important than ever.

One thing is certain: CAT season is going to be chaotic this year and every year, regardless of preparations taken. Ultimately, those who put talent and technological strategies in place and position their organizations to expect the unexpected will be able to navigate CAT seasons more effectively and efficiently.

Topics Catastrophe Claims Windstorm Talent Training Development

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Insurance Journal West July 2, 2018
July 2, 2018
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