How is COVID-19 affecting claims handling for hurricane damage?

hurricane

Hurricane Irma Aftermath (Wade Austin Ellis, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Thomas Johansmeyer, Head, Property Claim Services (PCS), Verisk


  • As tropical storms become more likely, COVID-19 is changing the ways resulting insurance claims are handled.
  • New tools and practices can help insurers work within physical distancing guidelines, for example.
  • A survey of claims-related organizations reveals how the sector plans to change its processes for this year’s hurricane season.

Over the past five years, hurricane activity has varied. In 2016, we saw the first hurricane to make landfall in Florida since 2005, and that followed an even quieter 2015. Then, in 2017 and 2018, five hurricanes affected some of the largest and most frequently hit coastal states, including Florida, Texas, and North Carolina. Insured losses for the five storms are approaching $100 billion. Insured losses for the two that had the greatest impact on Florida – Hurricanes Irma and Michael – are still developing as a result of certain localized issues associated with claim handling. Hurricane Irma’s overall insured loss estimate has been moving for nearly three years, longer than any other catastrophe tracked by PCS.

Three tropical storms have formed already in 2020
Three tropical storms have formed already in 2020
Image: PCS

Now think about that within the context of COVID-19. As a claimant, would you be ready to invite an adjuster into your home to check for structural damage, take a look at contents, and climb on your roof? And on the other side of the discussion, a claims adjuster may not want to enter several strange homes a day, which could increase the risk of infection. With catastrophes, there is also the issue of scale. One hurricane can result in hundreds of thousands of claims. Contemplate the risk of widespread virus transmission when there are thousands of claims adjusters possibly interacting with a dozen people a day.

There are reasons on both sides of the claim to want to respect the social distancing guidance that has been issued in jurisdictions affected by COVID-19. To do so will require insurers to accelerate their adoption of new tools and practices that have been tested over the past few years. The PCS team recently reached out to more than 20 claims-related organizations, including independent adjusting firms, insurance company claims departments, wind pools/residual markets, and catastrophe reinsurance teams for insights into how the industry would handle a major catastrophe during this year’s hurricane season.

 

The most intuitive way to reduce in-person interactions in the claim lifecycle is to use imagery and video in place of site visits. For simpler claims, this is not just possible but realistic. Remote adjusting apps for smartphones can help insurers understand the damage to a claimant, and even photos taken by the claimant and sent to the insurer can help. There is some risk of fraud that enters the claim lifecycle at this point, but the use of fraud-detection analytics can keep that risk to a minimum while accelerating the claim-handling process overall and helping people start the process of getting their lives – and their homes – back to normal. As one respondent from the US insurance industry stated: “The technology is there. We just have to embrace it.”

While there was considerable enthusiasm for this approach among the insurers who responded to us, they did identify some potential impediments. Claimants who are a bit older may not feel comfortable engaging with adjusters using smartphone apps. Unfortunately, this demographic has also been identified as being at the most risk when exposed to COVID-19. Additionally, several respondents expressed concerns about bandwidth and connectivity, which could experience considerable strain after a catastrophe event and during a period of quarantine or less severe form of restricted movement.

A comparison of COVID-19 cases reported in US states prone to tropical storms
A comparison of COVID-19 cases reported in US states prone to tropical storms
Image: PCS/Worldometer

In addition to person-to-person interaction, discussion of imagery and video usually leads to the role drones could play in the post-catastrophe claim-handling process. The overwhelming response we received on drones is that they can be very helpful in a fairly narrow range of situations. One respondent noted that drones take too much time to set up to be a viable alternative, adding that human eyes are “far superior”. Drone imagery tends to be most helpful when paired with other sources of information. Drones are “extremely effective when the loss situation allows them to be.” Yet, if they can play even a limited role in reducing in-person interaction and helping insurers deal with the sheer volume of claims that can follow a catastrophe, drones could remain an important post-event resource.

While there are several areas where technology can help reduce the interaction that can lead to virus transmission risk, some claims will continue to require boots on the ground. Determining whether damage was caused by wind or water is among the most common scenarios for personal insurance lines where someone may need to show up in person. Complex commercial claims, in particular, require considerable expertise – including engineering, and accounting professionals. Remote resources can help, but they would only be part of the solution. In such cases, insurer processes and policies regarding personal protective equipment use, social distancing, and minimizing interaction may help keep both adjusters and claimants safe. Although experience with a pandemic is relatively new, insurer and adjuster practices already included some measures that are relevant to the COVID-19 environment. After all, claim handlers go into disaster-affected areas to assess the damage caused. The practices already in place provided a solid starting point for adapting to handling claims during a pandemic.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Statement on the Code of Practice against disinformation: Commission asks online platforms to provide more details on progress made

UN working to prevent attacks on civilians in eastern DR Congo

Trump systematically upsets global order and trade: Where does this end?

China rare earth prices soar on their potential role in trade war

Violence on the rise in Darfur following Sudan military takeover, but UN-AU peacekeeping mission maintains ‘robust posture’

This company is breeding millions of insects in the heart of London

People, not technology, shape the future of manufacturing

Women-Friendly Spaces for Rohingya refugees: A place for protection and care

The UN’s unyielding effort to tackle sexual abuse and exploitation: our quarterly update

Energy Union: EU’s effort towards a cleaner climate with integrated energy market

Fertilisers/cadmium: Parliament and Council negotiators reach provisional deal

Yemen war: UN chief urges good faith as ‘milestone’ talks get underway in Sweden

Trump beats Clinton but Americans will learn the hard way that the US can’t change with an election

These are New York Public Library’s 10 most borrowed books

EU Youth Conference in Riga concludes with recommendations for ministers

Fed, ECB take positions to face the next global financial crisis; the Brits uncovered

Hydrogen isn’t the fuel of the future. It’s already here

European Parliament and Eurovision sign partnership for European Elections

Palestinian Bedouin community faces demolition after Israeli court ruling, warns UN rights office

COP21 Breaking News_03 December: Europe’s children urge leaders to commit to climate action at UN Climate Summit in Paris

3 reasons why Singapore is the smartest city in the world

Plants, the ‘core basis for life on Earth’, under increasing threat, warns UN food agency

Earth has more trees than it did 35 years ago – but there’s a huge catch

EP Brexit Steering Group calls on the UK to overcome the deadlock

Coronavirus: Macro-financial assistance agreement provides for €80 million disbursement to North Macedonia

This Belgian restaurant is following COVID rules using camper vans

Financial services are changing. Here’s how

Africa-Europe Alliance: Denmark provides €10 million for sustainable development under the EU External Investment Plan

Impressions of China

Italy can stand the US rating agencies’ meaningless degrading

Food for millions in Yemen at risk of rotting in key Red Sea port, warns UN

Commission takes further action to ensure professionals can fully benefit from the Single Market

Safer products: EP and Council close deal to beef up checks and inspections

UN rights chief bemoans unilateral sanctions on Venezuela, fearing ‘far-reaching implications’

MEPs back measures to reconcile career and private life

Commission disburses €8.5 billion under SURE to five Member States

This is what you need to know about the Iran nuclear deal

India is building a high-tech sustainable city from scratch

Children in crisis-torn eastern Ukraine ‘too terrified to learn’ amid spike in attacks on schools

The historic accomplishment of a seamless EU patent and intellectual property space

Humanitarian Aid 2016: The needs, the highlights, the crisis and the relief

Who really cares for the environment?

Flexible jobs can make work-life balance worse, a German study finds

How to decarbonize shipping without spending billions

Forget 2009, this is the real credit crisis of our time

Implementation of EU Facility for Refugees in Turkey: EU mobilises €663 million in humanitarian assistance

Gaza probe finds ‘reasonable grounds’ Israeli forces committed international human rights violations

To solve the climate crisis, we need an investment revolution

Invisibility outside the closet: health as a right for all

UN chief hails ‘positive developments’ towards ending political crisis in Bolivia

This is what emerging technologies mean for the future of infrastructure

Why support for Latin America’s early tech hubs is vital for the region

COVID-19 and the pursuit of financial inclusion in Pakistan

3+1 issues to haunt tomorrow’s EU Summit

Is the West gradually losing Africa?

Commission presents its response to Antisemitism and a survey showing Antisemitism is on the rise in the EU

GSMA Mobile 360 Series –Digital Societies, in association with The European Sting

EU-Turkey relations: Erdogan plays the refugee card while beefing up gas operations in the Eastern Mediterranean sea

New seat projections for the next European Parliament EU28

Wind farms now provide 14% of EU power – these countries are leading the way

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s