As estimates from Hurricane Matthew continue to come in, the numbers are climbing into the billions. Boston-based insurer, Karen Clark & Company (KC&C), estimates that insurers will pay approximately $7 billion for damages from wind, storm surge and inland flooding. Other estimates put the damage somewhere between $8 and $10 billion.
Among the most severely impacted coastal areas were Daytona Beach, Fla.; Tybee Island, Ga.; Savannah, Ga.; Charleston, S.C.; and Hilton Head, S.C. Several towns in North Carolina exceeded their 500-year flood levels with significant precipitation. According to the NOAA, Fayetteville received 12.05 inches, Raleigh had 8.17 inches and Goldsboro experienced more than 15 inches of rain.
What does all of this mean for insurers? Companies were moving resources and assigning claims areas well before Matthew hit. After the storm, insurers knew where they needed to deploy their teams, and some faced a variety of challenges. “Smaller insurers have been scrambling to get adjuster representation,” explained Peter Crosa, of St. Petersburg, Florida-based Peter J. Crosa & Co., and the president of the National Association of Independent Insurance Adjusters (NAIIA). “The Carolinas appear to be the most severely impacted and Hilton Head has been devastated.” Many of the claims involved second homes that were mostly unoccupied.
Crosa says that NAIIA members from across the country have sent adjusters to the affected areas to help member firms manage their claims load.
Mike Hearn, director of customer success at Spex, a property inspection platform company based in Denver, Colo., was traveling through North Carolina after the storm. Some of the homes experienced anywhere from a few inches to several feet of water. “As with most hurricanes, damages are generally associated with heavy winds, large amounts of rainfall and storm surge. There is plenty of wind damage from Hurricane Matthew in the form of downed trees and shingle losses to roofs,” shared Hearn.
“In some cases, houses were completely inundated with water,” said Hearn. “Making matters worse is the fact that many of these homes had no flood insurance since they were not declared to be in flood zones.”
The 48 counties affected by the hurricane in North Carolina, are also home to many of the key agricultural producers for the state. Harvest season was just beginning for crops like soybeans, sweet potatoes and peanuts. According to the North Carolina Department of Agriculture & Consumer Services, 1.9 million chickens were lost during Hurricane Matthew and that number could grow even higher after the flooding recedes. Hog farmers seem to have fared better, since many farmers were able to relocate their animals to higher ground. The impact of the storm will be felt in grocery stores in the months to come.
A week after Hurricane Matthew struck Florida, almost 40,000 claims had been filed according to the Florida Office of Insurance Regulation. In North Carolina, State Farm insures the largest number of homeowners, and had moved its catastrophe response team into the affected areas, concentrating on the most severely impacted first. Nationwide and other insurers are also working throughout the state.
Many insurers are relying on various types of technology to investigate and manage these losses. “Technology is becoming more prevalent with this event,” said Hearn. “We have heard of drones being used on some claims, as well as cloud-based mobile-first software to expedite claims handling. The best-suited software for recovery efforts like this don't require connectivity, since internet access remains an issue in many cases.”
Like hurricanes Katrina and Sandy, Matthew will offer insurers the opportunity to further refine their catastrophe response, educate policyholders on how to prepare for and mitigate the risks associated with storms and other weather events, and demonstrate how insurance is far more than just the policy that was purchased.