With the official arrival of the 2001 hurricane season, Royal & SunAlliance is confident of its ability to respond to major disasters because of the successful track record of its Catastrophe Center, one of only a handful in the insurance industry focused exclusively on catastrophe response.
Created about two years ago in Milbank, S.D., the Catastrophe Center has already earned high marks in customer approval ratings, averaging nearly 90 percent at highly satisfied or above for the more than 6,000 catastrophe claims it processed last year.
Catastrophe Center staff members have achieved this level of service through comprehensive plans created for all types of disasters, ranging from tornadoes, hailstorms and blizzards in localized areas to major hurricanes and earthquakes impacting multi-state regions.
The insurance industry has traditionally relied on its ability to mobilize regional claims offices and to create emergency field units to handle catastrophe responses. That was also the approach that Royal & SunAlliance, one of the top 20 property and casualty insurance companies in the U.S, had operated under until company executives hit upon the idea of creating a core staff of catastrophe specialists about two years ago.
The four-member Royal & SunAlliance Catastrophe Center springs into action whenever the Property Claim Service (PCS), an industry service bureau, reports more than $25 million in total losses in a defined area. While major events, such as hurricanes, floods and earthquakes come under the purview of the Catastrophe Center, the Center’s staff is also responsible for managing claims from local or regional disasters, such as hailstorms, tornadoes and blizzards.
For each catastrophe situation, the Center determines the extent of damage, develops an action plan and marshals all of the resources needed for an effective response, including the company’s 2,500-member U.S. claims staff and network of adjusters, accountants, engineers, salvors, contractors and loss-mitigation specialists.
The ability to respond effectively to a catastrophe is based on advance preparation, and that is one of the greatest strengths of a centralized catastrophe center, according to Wood.
The goal of advance planning is to fully understand the areas at risk and how Royal & SunAlliance will respond in the event of a major storm. Not only does the company look at concentrations of policyholders, it also researches the types of building construction in each area to better understand the level of damage that could occur.
Royal & SunAlliance decided to locate its Catastrophe Center in Milbank, S.D. adjacent to a regional claims office so that additional claims personnel would be immediately available whenever needed. The company also believed that a location deep in the country’s heartland would offer an added element of security.
Advanced computer and telecommunications technology, which is essential to the operations of the Catastrophe Center, also meant that it could be located virtually anywhere in the country. Laptops and digital cameras allow field claims adjusters to submit images and information electronically to catastrophe claims adjusters in the Milbank center. Adjusters can quickly review information, confirm coverage from centralized databases and begin providing a complete solution to the insured’s loss.
Catastrophe adjusters use the Global Positioning System (GPS), the same satellite-based system that boaters call on to plot courses on the high seas, to plot their travels in storm ravaged areas. With latitude and longitude recorded for each property insured by the company, GPS allows adjusters to find the location of houses that may have been completely destroyed during a storm.
All of the technology employed at the Milbank Center and company-wide is designed to assure fast, consistent and accurate service.
Royal & SunAlliance USA, headquartered in Charlotte, N.C., is part of London-based Royal & SunAlliance Group plc. The Group has offices in 55 countries, serving more than 20 million customers in more than 130 countries.
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