Catastrophe (CAT) plans, like strategic plans, tend to be crafted in offices far away from the adjusters who will implement them. These voluminous, dust-covered binders sit comatose, only to be revived when an actual catastrophe looms.

Failed CAT plans have costly and long-term consequences including interest on late claims payments, unnecessary claims cleanup teams, loss of goodwill, lack of retention of insureds, litigation costs, unfavorable court decisions, and potential bad-faith or punitive damages.

CAT plans fail because they:

  • Are not scalable

  • Do not prepare adjusters

  • Are not adaptable

  • Are not coordinated

  • Do not empower adjusters

  • Are not sustainable

Let's review the problems and potential risks of all these concerns.

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