Last year was rather quiet when it came to claim handling. Of course, many of you are still contending with the devastation of the 2004-05 hurricane seasons, in as much as a lot of that claimant suffering and destruction is still on the radar.
Now the latest predictions for the 2007 hurricane season are out and the soothsayers are saying, “Beware!” So there you go, East Coast. But their predication track records, to be kind, were way off base for the 2006 season, with not one serious landfall. Yes, there was trouble in Bermuda and some of the Caribbean Islands, but nothing compared to the Gulf Coast fiascos of '04 and '05. That was made up for, in part, by the challenges of numerous tornadoes in the Midwest and wild fires in the West. And, at this writing, the Northwest is being battered by torrential rains, snow, and wild winds, all of which will combine to keep adjusters busy in the immediate future.
Weather! Can't live with it, can't live without it. Add to that all the talk of global warming, which nobody seems to be doing anything about, and we see monstrous challenges facing the industry in years ahead … but not in '07. It will be interesting to see how these dire predictions will affect claim operations in the distant future.
For now, we can concentrate on the immediate challenges. Legislative changes that will affect claim handling will not impact operations that much in '07, since those enactments move rather slowly through the process. That said, there are still areas of concern that no doubt will affect your claim-handling operations. Aside from all the weather-related challenges facing the insurance industry, we have to keep a close eye on other developments (or lack of) that can hamper your operations. Just to name a few:
The volatile situation in the Middle East, which could negatively impact homeland security. The political arena in Washington seems stymied at the moment to come up with a plan.
The threat of identity theft, and the implementation of identity theft coverages by a number of forward-thinking companies, is certain to present additional challenges for adjusters.
Fraud (in all its aspects). Think about all those flooded vehicles streaming back into the market. Think about staged accidents. Think about workers' comp fraud, in its numerous manifestations. You could make a career (as many have) in just uncovering fraudulent activities, which cost the industry billions of dollars annually.
Challenges of a population increase. More cars on more congested highway systems present an ever-increasing challenge to auto claim adjusters facing higher and higher case loads. (Check out this month's Iconoclast.)
Litigation challenges. To say we're a more litigious society these days is putting it quite mildly. The challenge is to do a better job up front and avoid going to court as much as possible.
Finally, the challenges of risk management initiatives that can put adjusters into precarious scenarios as they learn to sift through policy limitations and legalese, trying to determine liability.
Looks like the claim-handling community will have its hands full as we negotiate 2007 challenges and changes in the insurance landscape. Good luck to one and all. You have faced these challenges in the past and succeeded admirably. You can do it again.
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