Getting ahead of impending CAT challenges
The surge of claims during CAT events can easily lead to payout mishaps.
Summer is wrapping up, leaving much of the country relatively unscathed compared to CAT predictions. Severe weather events have been quieter than expected this year, and ideally, that trend remains true as we approach the tail-end of hurricane season and look ahead to the winter freeze.
But no matter the time of year, significant weather events can happen – often without much warning – and they always create a surge in demand for insurance carriers, leading to significant operational challenges. Without proper planning, the volume spikes during CAT scenarios can quickly overwhelm the system, especially if there aren’t enough adjusters to handle the number of calls – creating longer wait times, slower service, repeated phone calls, and generally inadequate customer experiences during a time when policyholders need the most support.
While the country hopefully continues to experience a lull in extreme weather activity, it’s a good time for insurers to take a fresh look at their CAT practices – and reset, if necessary – to prepare for the inevitable events to come.
Here are four best practices to consider that help alleviate the challenges typically faced during CAT seasons and lay the foundation for a better claims experience:
Encourage customers to adopt a digital mindset
By proactively encouraging digital and paperless options, such as email and text, and promoting online account creation and app downloads, carriers can foster a digital-first mindset among policyholders that will improve the overall experience during stressful CAT events without overextending resources. Increasing the likelihood of digital engagement – whether that’s filing the initial claim, communicating with the adjuster, or receiving payments digitally – can streamline the claims process, eliminate the need for excess phone calls, and shorten the time-to-resolution, ultimately leading to happier customers and less adjuster burnout. Encouraging digital behavior should be done throughout the customer lifecycle, starting with customer onboarding, so that customers think digital-first when it comes time for a claim.
Deploy proactive weather alerts
These alerts should not only provide timely information about impending weather events but also encourage individuals to take preventative actions to minimize potential losses, such as offering tips for securing property during a hurricane or relocating vehicles to avoid even the most isolated storms (weather technology has become very targeted and accurate). The goal of weather alerts is threefold: (i) minimize losses, (ii) proactively guide policyholders toward digital filings to avoid overloading your claims operation, and (iii) drive customer loyalty by showing you are there for them in a time of need.
Send regular status updates
Especially during CAT events, when volume becomes high and cycle times begin to grow, inbound status inquiries from customers can easily start to overwhelm adjusters. Carriers can keep customers informed about the progress of the claim, alleviate anxiety, and reduce the need for unnecessary calls by sending regular, proactive status updates. Again, these updates would ideally be automated so adjusters can proactively let the customer know what’s happening at each step of the claim, whether or not it’s progressing, and set expectations on what to expect next – all without overextending resources. This not only enhances customer satisfaction and helps them feel informed but also frees up adjusters to focus on more complex tasks.
Maintain rigor around payout accuracy and fraud mitigation
Carriers, of course, always want to make sure they pay policyholders what they are owed. However, the surge of claims during CAT events can easily lead to payout mishaps (e.g. when adjusters tend to be on autopilot for claim resolution) and fraudulent claims slipping through the cracks (e.g. a policyholder might claim they need a new roof when it was already damaged pre-storm or via other fraudulent behavior). Carriers also depend on more independent adjusters during these times of increased claim volume. Automated fraud identification tools and thorough quality control processes are crucial to maintaining accuracy and preventing fraudulent activities.
Lastly, and perhaps most importantly, remember that empathy is fundamental to a positive claims experience and needs to be woven into each of these steps. Treating policyholders as individuals who have experienced potentially devastating events is crucial. Carriers should do everything in their power to foster a culture of empathy within their organization, train staff to understand the impact of claims, and share inspiring stories of exceptional customer service. These four best practices can go a long way in alleviating the challenges typically faced during CAT events – but only if adjusters are empowered to provide compassionate and supportive assistance to policyholders in need.
Alex Burgess is principal industry strategist at Hi Marley.