4 Ways for Insurers to Reduce Losses During Severe Storms

Managing Overall Loss Cost While Keeping Customer Satisfaction High

BY PASCAL BEGIN AND SAUMI SHOKRAEE INSURANCE, NATURAL HAZARD

With the nation grappling from a seemingly endless array of severe weather events like tornadoes, hail and extreme wind, it is more important than ever for insurers to be able to control their losses. After individuals suffer significant damages, their first item of action is to file a claim with their property insurer and rebuild their homes as quickly as possible. These moments are make-or-break opportunities for carriers to positively engage with their customers.

Fortunately, with the aid of new technology, improved quality control, and better client relationship management, insurers can cater to the needs of their customers while also controlling claim costs during severe convective storms. While customer satisfaction in the property claims process is higher than ever, some policyholders continue to be dissatisfied with premium increases, the perception of undue effort, and unnecessary delays in the claims process.^[1]

Optimizing the time and resources involved in the claims process is the key to making sure customers are satisfied while simultaneously reducing losses. Here are some areas where this can be done:

1. Optimizing the deployment of claims resourcesOne way insurers can control costs is by optimizing the first notice of loss (FNOL) process during severe storms. A common issue during natural catastrophe events is that insurers are overwhelmed and do not have enough adjusters available to reach all policyholders promptly. Because some policyholders will be more severely impacted by storms than others, there is an optimal way to deploy claims resources.For those with the most severe impacts, traditional methods can be used (sending an adjuster in person) whereas those with less of an impact can be given the option to file their claim electronically. This reduces costs related to managing FNOL while accelerating response time and increasing customer satisfaction.
2. Rapid claim validation technologyClaim validation is another piece of this puzzle that can be optimized using the latest technology. Integrating geographic information systems (GIS) and claims allows an adjuster to easily validate a claim or determine if additional assessment is required. Weather verification technology can help prevent fraud and speed up the adjusting process. With hail data granular enough to tell what size of hail occurred at which time on what specific parcel(s), claims processing becomes far simpler.
3. Optimizing scoping with a triage systemAnother way to reduce costs is by optimizing the time and resources required for scoping. It may not be efficient for an insurer to send their most experienced adjuster for a relatively simple claim. This can be done by using a triage system that considers the type of loss, severity, location, type of insured, and the availability of your field adjusters. The carrier can then decide whether it is better to send a staff adjuster, use a third-party solution, use a desk-adjustment solution in conjunction with a third-party, or ask the policyholder to use self-service scoping technology.
4. Improving accuracy of scoping and estimatesClaims repair costs can also be controlled. This is done by improving the accuracy of the scope and prices used to generate the repair or replace estimate. Technology can be used to obtain exterior and interior measurements and maintain consistency across all claim estimates. Local material, labor, and equipment costs can be considered and broken down by components to facilitate negotiation and eventually settlement. And of course, this data should be backed by industry experience, making it defendable and sustainable if price surging occurs during large storms.

As the world experiences a changing climate, insurers must maintain their critical business while making sure their policyholders are taken care of. Optimizing the deployment of claims resources, using rapid claim validation technology, and optimizing scoping with triaging and location-specific intelligence are the keys to insurance resilience in the modern era. With these solutions in hand, communities can rest assured that insurance companies are able to assist them after severe weather events.

© 2021 CoreLogic Inc., All rights reserved.

^[1] https://www.jdpower.com/business/press-releases/2020-us-property-claims-satisfaction-study