MANAGING CALAMITY TO GET AHEAD

NEW YORK, August 26th, 2011 — Hurricane Irene

LOUISIANA, September 1st, 2011 — Hurricane Lee

TEXAS, August 31st, 2011 — Forest Fires

What is worse is that the hurricane season does not even end till November 20th! Are you ready to take more hits? Read this article to find out how you can come out ahead when you encounter such tough times in the future. 

This time the triple disasters have been so bad that many insurance companies have gone bankrupt. Many of them themselves have had to move locations and others have suffered losses that are going to kill their company. Interestingly the fact that is hurting them is NOT the claims payment itself. Most insurance companies have figured out reserves and reinsurance to protect against these types of losses but the real fact is that claims processing is killing them badly because they are not able to service their customer in their times of need as they are all heads down trying to process the claims requests made. Meaning, they are going to lose all these customers in the end!

“Those who take the time to prepare for a disaster are in the best position to survive a catastrophe and recover as quickly as possible.” Says Jeanne M. Salvatore, Senior Vice President and consumer spokesperson for the I.I.I.

Great advice but what do we do to prepare? How do go about preparing! We have tried to help you think through that process from our experiences with other companies like yours in the industry. The playbook is simple but needs you to execute by taking some timely decisions now. If you have questions and concerns about what we have recommended feel free to get contact us. We will be glad to help in any way possible.

Before:

1.  Know Your Risk of the calamities

Don’t underestimate the risk of natural calamities. Please visit the FEMA’s National Flood Insurance Program (NFIP) website www.FloodSmart.gov Video: Water Damage to get a better handle on how these relate to your customer base.

2. Provide timely reports of good risk mitigation to your customers

You will be amazed as to how little business knows about anything other than what they do. You know your business the best. Tell them how to cover themselves and prepare for calamities and their risks.

3. Maintain a customer risk profile

Maintain a customer risk profile and make sure that you can pull it up any time needed in an emergency. You can even take help from your insurance dashboard. Better still see if can have all their contacts on auto dialer and auto electronic emails for instant contact in case of an emergency.

4. Sign up with a partner to handle ‘First Claim’

You can’t be hiring, training and taking care of your risk when you are in the middle of a calamity. You must be on the field taking care of your customers.  Many times your offices and employees might not even be functional during such a crisis. You need someone or some organization (Far enough not to be affected by the calamity) that is located remote enough to handle your crisis. Before you sign up with such a company do review the following:

1. Their ability to ramp up quickly (Hire, Fire, Train)
2. Their ability to execute to your SOP in a ‘Timely’ and ‘Quality’ manner
3. With an remote site that has a Disaster Recovery (DR) plan
4. Do a fire drill to find out if they can work under simulated pressure
5. Have them be a part of your team on an ongoing basis and process your claims on an ongoing basis. That way when it comes to an emergency they just have to ramp up

 

5. Have an off-site backup center for claims management:

You need to have an off-site/ back office partner that can take the load of claims process and paper processing to your customer when they are in need. Make sure that you provide 24/7 support to your customers. This is critical for customer satisfaction.

During:

1. 1.     Take stock of your office and employees first!

It is critical that you make sure that you have your team in a safe place. Once that is secured make sure that you have all your documentation in an electronic form in a cloud that can be accessed from anywhere.

This is the time your trained partner will come in more than handy and will be the make or break for your life beyond the calamity.

1. 2.     Monitor the calamity and update your customer before the storm or the fire or any other calamity hits them.

The key thing is to be with your customers in their time of need. You can’t be doing this if you are not prepared and organized internally with your paperwork and SOPs. Always keep your dashboard updated and ready. You need to make sure that your electronic documentation is handled by experts and not student workers that can do just what enough to have something in a spreadsheet that you can never find in times of crisis.

After:

1. 1.     ‘First Claims’

Make sure that you can service your customer as quickly and as effectively as possible. This is what we are in the business for i.e., helping people in times of their need!!! But you will be saying “From my recent experience it is impossible to do since we don’t have as much staff and we can’t hire new staff and train them in this short a time”!!! This is something to be happy about because you are now ready to go beyond the normal and hire partners to help you in good times and bad. Hire a partner that is your insurance for your bad times and good. Resources Claims Partner, ‘First Claims Support organizations’.

1. 2.     After the storm subsides

This is the time to plan for the next storm and the next emergency. Invest in your next annual budget and work with a partner that can start working with from an off-site location on a regular basis. That way they are part of your team in good times and can learn your systems and SOPs. These people will be ideally underwriting support teams that can that are trained in CPCU, INS and other insurance common exams so that you don’t have to train them.

Better still; have them process your claims, rating, quoting and issuance including file setup. That way they can be your staff to help your staff become more efficient and help you in growing your business.

We have all seen this time and time again, when we stand by our customer in their time of need they will come back to us time and time again even when they are paying higher costs because they believe that you care for them and will take care of them in their times of need.

In order to take care of them you need to take care of yourself. Start taking care of your business today by planning for the next contingency. Making sure that you are planned, have the resources to serve you in your customer times of need can ensure that you use any calamity to launch your business into the next level!

If you like to learn about how to engage and work with certified, audited, off-site insurance support partners that can help you immediately have back-up plan to your office, act as a surplus staff when needed, provide you hiring and firing advantages without adding to your overhead, and enabling your team to grow as they can now focus on the value added activity and growing your sales then please feel free to contact us at + (1888) 246-7211 extension 4 or 6 or drop us a line atinfo@vantageagora.com

Other interesting facts about how the next crisis is just round the corner and how badly it can hit you:

THE TEN MOST COSTLY CATASTROPHES, UNITED STATES

($ millions)

Insured property losses

Rank

Date

Peril

Dollars when occurred

In 2010 dollars (2)

1

Aug. 2005

Hurricane Katrina

$41,100

$45,481

2

Sep. 2001

Fire, Explosion: World Trade Center,Pentagon terrorist attacks

18,779

22,924

3

Aug.1992

Hurricane Andrew

15,500

22,412

4

Jan. 1994

Northridge, CA earthquake

12,500

17,318

5

Sep. 2008

Hurricane Ike

12,500

12,735

6

Oct. 2005

Hurricane Wilma

10,300

11,398

7

Aug. 2004

Hurricane Charley

7,475

8,548

8

Sep. 2004

Hurricane Ivan

7,110

8,130

9

Sep. 1989

Hurricane Hugo

4,195

6,678

10

Sep. 2005

Hurricane Rita

5,627

6,227

(1) Property coverage only. Does not include flood damage covered by the federally administered National Flood Insurance Program.(2) Adjusted for inflation through 2010 by ISO using the GDP implicit price deflator.Source: ISO’s Property Claim Services (PCS) unit.

INSURED LOSSES, U.S. CATASTROPHES, 2001-2010

Year

Number of catastrophes

Number of claims(millions)

Dollars when occurred($ billions)

In 2010 dollars($ billions)

2001

20

1.5

$26.5

$32.4

2002

25

1.8

5.9

7.0

2003

21

2.7

12.9

15.2

2004

22

3.4

27.5

31.4

2005

24

4.4

62.3

68.9

2006

31

2.3

9.2

9.9

2007

23

1.2

6.7

7.0

2008

36

4.1

27.0

27.6

2009

27

2.2

10.5

10.6

2010

33

2.4

14.1

14.1

(1) Includes catastrophes causing insured losses to the industry of at least $25 million and affecting a significant number of policyholders and insurers. Does not include flood damage covered by the federally administered National Flood Insurance Program.(2) Adjusted to 2010 dollars by ISO using the GDP implicit price deflator.Source: ISO’s Property Claim Services (PCS) unit.

View Archived Tables:INSURED LOSSES, U.S. CATASTROPHES, 1999-2008 (1)INSURED LOSSES, U.S. CATASTROPHES, 2000-2009 (1)

CATASTROPHES BY QUARTER, 2010

($ millions)

Quarter

Insured losses

Number of catastrophes

1

$2,570

7

2

6,380

14

3

2,030

8

4

3,135

4

Full year

$14,115

34

(1) Does not include flood damage covered by the federally administered National Flood Insurance Program.

Note: Catastrophes are assigned serial numbers by ISO’s Property Claim Services (PCS) unit when the insured loss to the industry resulting from an occurrence reaches at least $25 million and affects a significant number of policyholders and insurers.

Source: ISO’s Property Claim Services (PCS) unit.

View Archived Tables:CATASTROPHES BY QUARTER, 2009 (1)MAJOR U.S. CATASTROPHES, 2008

TOP 15 MOST COSTLY HURRICANES IN THE UNITED STATES

($ millions)

Estimated insured loss (1)

Rank

Date

Location

Hurricane

Dollars whenoccurred

In 2009dollars (2)

1

Aug. 25-30, 2005

AL, FL, GA, LA, MS, TN

Katrina

$41,100

$45,148

2

Aug. 24-26, 1992

FL, LA

Andrew

15,500

23,702

3

Sep. 12-14, 2008

AR, IL, IN, KY, LA, MO, OH, PA, TX

Ike

12,500

12,456

4

Oct. 24, 2005

FL

Wilma

10,300

11,315

5

Aug. 13-14, 2004

FL, NC, SC

Charley

7,475

8,489

6

Sep. 15-21, 2004

AL, DE, FL, GA, LA, MD, MS, NJ, NY, NC, OH, PA, TN, VA, WV

Ivan

7,110

8,075

7

Sep. 17-22, 1989

GA, NC, PR, SC, VA, U.S. Virgin Islands

Hugo

4,195

7,258

8

Sep. 20-26, 2005

AL, AR, FL, LA, MS, TN, TX

Rita

5,627

6,181

9

Sep. 3-9, 2004

FL, GA, NC, NY, SC

Frances

4,595

5,219

10

Sep. 15-29, 2004

DE, FL, GA, MD, NJ, NY, NC, PA, PR, SC, VA

Jeanne

3,655

4,151

11

Sept. 21-28, 1998

AL, FL, LA, MS, PR, U.S. Virgin Islands

Georges

2,955

3,889

12

Oct. 4, 1995

FL, AL, GA, NC, SC, TN

Opal

2,100

2,956

13

Sep. 14-17, 1999

NC, NJ, VA, FL, SC, PA, 10 other states

Floyd

1,960

2,524

14

Sep. 11, 1992

Kaui and Oahu, HI

Iniki

1,600

2,447

15

Sep. 5, 1996

NC, SC, VA, MD, WV, PA, OH

Fran

1,600

2,188

(1) Property coverage only. Does not include flood damage covered by the federally administered National Flood Insurance Program. As of September 2009.(2) Adjusted to 2009 dollars by the Insurance Information Institute, using the Bureau of Labor Statistics' Inflation Calculator.Source: ISO’s Property Claim Services unit (PCS); U.S. Bureau of Labor Statistics.

View Archived Tables:TOP 15 MOST COSTLY HURRICANES IN THE UNITED STATES

THE TEN MOST COSTLY WILDLAND FIRES IN THE UNITED STATES

($ millions)

Estimated insured loss

Rank

Date

Location

Dollars whenoccurred

In 2010dollars (2)

1

Oct. 20-21, 1991

Oakland Fire, CA

$1,700

$2,516

2

Oct. 21-24, 2007

Witch Fire, CA

1,300

1,353

3

Oct. 25-Nov. 4, 2003

Cedar Fire, CA

1,060

1,247

4

Oct. 25-Nov. 3, 2003

Old Fire, CA

975

1,147

5

Nov. 2-3, 1993

Los Angeles County Fire, CA

375

530

6

Oct. 27-28, 1993

Orange County Fire, CA

350

495

7

Jun. 27-Jul. 2, 1990

Santa Barbara Fire, CA

265

406

8

Sep. 6-Sep. 13, 2010

Fourmile Canyon Fire, CO

210

210

9

May 10-16, 2000

Cerro Grande Fire, NM

140

175

10

Jun. 23-28, 2002

Rodeo Chediski Complex Fire, AZ

120

144

(1) Property coverage only for catastrophic fires. Effective January 1, 1997, Property Claim Services (PCS) unit defines catastrophes as events that cause more than $25 million in insured property damage and that affect a significant number of insureds and insurers. From 1982 to 1996, PCS used a $5 million threshold in defining catastrophes. (2) Adjusted for inflation through 2010 by ISO using the GDP implicit price deflator.Source: ISO’s Property Claim Services (PCS) unit.

View Archived Tables:THE TEN MOST COSTLY WILDLAND FIRES IN THE UNITED STATES

TOP TEN STATES FOR WILDFIRES RANKED BY NUMBER OF FIRES

(As of November 2010)

Rank

State

Number of fires

Number of acres burned

1

Texas

6,691

203,891

2

California

6,502

108,742

3

North Carolina

3,665

20,000

4

Georgia

3,489

14,534

5

Alabama

2,357

26,331

6

Florida

2,334

37,929

7

Louisiana

2,166

33,401

8

Minnesota

2,037

33,969

9

Massachusetts

2,014

2,117

10

New Jersey

2,011

10,630

Source: National Interagency Coordination Center.