The 2011 hurricane season is upon us following a spring full of storm activity that has been more prolific than the last several years combined. Some much-needed demand for adjusters was sparked by the onslaught of tornadoes, which stretched over a 10-state area. Catastrophe losses for the first half of the year are hovering near $17 billion, estimates Robert Hartwig, president of the Insurance Information Institute.
Primary insurers, not reinsurers, will swallow most of these losses, according to Fitch Ratings. It has been reported that more than 13,000 adjusters were deployed, and Cunningham Lindsey/GAB says that some 920 adjusters were rolled out to the areas of devastation. Now with the purchase of GAB by Cunningham Lindsey, they will no doubt prove to be a giant in the industry. Their adjuster support and updates on technology set a high bar.
There is still a reported need by Pilot Catastrophe for auto adjusters. Nomad Adjusting is staffing up with a client-imposed need for all types of adjusters, as stated by Tim Molony:
“We're focusing on obtaining core adjusters for the 50 largest metropolitan areas nationwide,” he says. “While we have seasoned adjusters in many of these locations, we're still lacking adjusters (and back-up adjusters) in many areas. We have core adjusters in Atlanta and Detroit who cannot quite handle the volume we're receiving and need to add quality adjusters in those areas. We are looking to work with daily adjusters all over the country.”
Allstate faced their first catastrophes since moving to the Xactimate estimating system, a move from MSB and utilization of Eagle View Technology. It is too early to issue a grade on how that worked out for them.
Now for the 411 on litigation. It appears that, as it has in the past, that old issue of the independent adjusters and overtime has reared its ugly head again. This time with Worley adjusters and the BP oil spill.
Along with those tornados in Alabama, come the disputes that linger for some time. They will likely be handled in one of several ways. Some claims will end in state-sponsored mediation or a little-publicized form of arbitration which is also referred to as “appraisal” which is afforded in most policies. A recent check of state and federal courts indicated no related actions as of yet.
The claims process, to many, seems a long and difficult task. Companies say that in part it's just how their processes work; they are also trying to prevent fraud. Frank Scafidi, public affairs director for the National Insurance Crime Bureau, says that the insurance industry traditionally says that 10 percent of property claims dollars paid out are obtained through fraud. Scafidi said that number currently equals about $30 billion. “We know that claim padding is a significant part of the fraud picture,” he says.
Elsewhere:
- A bill has been introduced by Mississippi Sen. Roger Wicker, R-Tupelo, that would allow federal officials to determine the extent to which wind, as opposed to flooding, contributed to the damage of homes destroyed by hurricanes.
- By the end of May, the National Weather Service had received more than 1,400 reports of tornadoes, including 875 in April. According to the NWS, 536 people have been killed this year in tornadoes.
Until next Friday, this is your Adjuster 411. Check back with us next week when I will give you some news of some major personnel changes of interest at some companies and a little insight into the difference a possible new attorney general in a hurricane-prone southern state could make.
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