Bracing for another active hurricane season amidst COVID-19
What lessons can the insurance industry pull from the past few years of heavy storms?
The 2020 Atlantic Hurricane season was one of the most active on record. The loss adjusting and claims industry had to quickly adapt with new tools, technologies and resources for storm damage assessments and resolutions during the unprecedented COVID-19 pandemic that persisted throughout the season. This year’s hurricane season will pose similar challenges. A look back at 2020, however, offers insight into lessons learned that could provide guidance for responsive loss adjusting and effective claims management for the 2021 season within the ongoing pandemic.
Last year’s season was historically prolific in terms of the severity and frequency of storms. The year had 30 Atlantic named storms, breaking the record of 28 set in 2005, which experienced Hurricanes Katrina, Rita and Wilma. The season also broke the record for the most storms making landfall in the continental U.S. in a single season with 12 hurricanes, exceeding the longstanding record of nine that occurred in 1916.
In April, the team of leading researchers at Colorado State University issued its annual forecast for the season, which runs from June 1 to November 30. Early indicators suggest that 2021 will be another busier than average season, with a 25% likelihood for an “extremely active” season and a 35% chance for an “above average” Atlantic hurricane season. They are predicting 17 named storms, eight of which will turn into hurricanes, with four becoming a Category 3 storm or higher. The insurance industry is now bracing to endure what could be another season of high-level storm activity resulting in severe property damage.
In 2020, adjusters experienced obstacles during what would otherwise have been “routine” storm loss site inspections. All the challenges adjusters faced in the aftermath of a catastrophic event were amplified by the strict precautions required by COVID -19. Restrictions and threat of exposure hampered the ability of CAT adjusters to freely travel and investigate claims, thereby demanding greater reconnaissance planning and flexibility to adapt to various contingencies. This also allowed loss adjusters to maximize the usage of cutting-edge technology to assist in virtual inspections or virtual meetings with insureds.
When loss adjusters were able to reach the destination for on-site investigation, they were required to comply with safety measures, including temperature check-ins, social distancing of six feet from other personnel, carbon-filtered face masks and other personal protective equipment (PPE) for the duration of the process. In some instances, adjusters were required to bring their own PPE due to a lack of supply at the storm location. The 2020 hurricane season presented loss adjusting scenarios never before experienced due to the unprecedented global pandemic.
Flexible planning
Every hurricane season has its challenges. In 2021, loss adjustment planning will need to be especially agile for responding to a myriad of contingencies that could arise.
Catastrophe loss adjusting can be mentally and physically taxing work. An important aspect of an adjuster’s support system to tackle an on-site assignment is camaraderie by deploying the team together as a unit. When sending a CAT team of adjusters and administrative support is physically impossible or poses unnecessarily health risk, we first assemble the team in one location. By building a cohesive unit at the outset, we can unify the group to ensure consistency and solidarity.
Dispatching claims professionals during a hurricane season has not fundamentally changed, but the manner in which the teams operate faces new obstacles that require flexibility and innovation. Complications can arise from lack of readily available travel, widespread power outages and infrastructure shutdowns.
In addition to catastrophes throughout the U.S., some of our CAT adjusters also have decades of experience adjusting claims throughout the Caribbean, where logistic and operational challenges can be exacerbated by the pandemic. Small island nations that are vulnerable to an active CAT hurricane season, for example, may impose lockdowns, restrict cross-border travel or mandate quarantine guidelines.
Triage damage severity
The first step is to assess the severity of the storm damage and develop a strategic plan by evaluating the conditions surrounding the property damage, identifying complex issues to be solved and strategizing the most efficient way to capture the relevant data on behalf of the insurer.
When circumstances require, it may be prudent to send a smaller team rather than dispatch a large team of adjusters to the damaged locations. Depending upon the accessibility of a location, it may be necessary to incorporate systems and procedures for remote adjusting in the aftermath of a hurricane event, enabling adjusters to promptly respond to insurers and their clients. In these situations, on-site adjusters may measure and capture images of the damage and transmit the information to the off-site support to manage the claims analysis. Using an insured’s exact coordinates helps to confirm the correct risk address, pin-drop location and utilize ruler tool technology for accurate measurements.
Some event scenarios require partnerships with local drone operators to capture video footage of the damage not accessible from the ground level. The hybrid approach delivers a real-time collection of data and imagery, which reduces potential adjuster exposure to COVID-19.
Leverage new technologies
Sophisticated technologies are being advanced to upgrade the quality and transmission of collected measurement data and imagery of damaged properties via satellite footage, heat sensors, virtual reality applications, 3- and 4-D modeling and algorithms.
The firm is now using a video-enabling reporting tool designed for on-site data collection and virtual sharing of photos and videos through a mobile app platform. The technology can capture, validate, and share video and other media directly from the user’s smart device by uploading the information to a remotely located third party in real-time. Through the smart device, adjusters and users with access to the system can facilitate live video chats and on-site, real-time video recording for timely reporting and assessment.
Experienced catastrophe adjusting teams are trained to handle the most difficult disaster events through coordinated planning and innovative solutions. Loss adjusters are now well prepared to effectively manage even the most extreme claims amidst the ongoing backdrop of the unprecedented circumstances created by COVID-19.
In bracing for the 2021 hurricane season, the greatest shift has been an emotional one for adjusters. Last year, on-site inspections were clouded under a fear of the unknown surrounding COVID-19. Now, as U.S. states begin to reopen and with the vaccine rollout underway, adjusters are more confident in their ability to travel, adhere to safety precautions and avoid exposure. It will be critical for adjusters to follow the protocols established by federal, state and local guidelines.
Danielle Kaminski, Esq. (danielle.kaminski@charlestaylor.com) is a senior vice president with Charles Taylor Adjusting and has served as outside legal counsel, primarily for insurance clients, handling a variety of complex property, energy, inland marine, marine, and aviation claims.
Cullen Sophy (cullen.sophy@charlestaylor.com) is managing director, property, for Charles Taylor Adjusting and is responsible for managing the property team. He also focuses on new business growth and developing client relationships.
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