Disaster Season Is Here

Whether your company is large enough to have a dedicated catastrophe team or not, it is always a good idea to have a catastrophe plan. Your plan should incorporate some of the items listed in Figure 1.

Practical Matters First

To begin, it is a good idea to decide who will be leading your team when a catastrophe occurs. Identifying your catastrophe manager(s) early on allows you to review their experience, designate who will serve on the team, and ensure that those selected understand both their roles and responsibilities. As each storm has its own set of unique characteristics, getting the right manager is imperative. An effective manager should be an experienced, flexible, and adept decision maker. Perhaps most importantly, the person operating in this capacity should be able to handle whatever comes his way, acting appropriately at all times.

The 21st century has brought social networking and "apps" to the forefront of communications. Updates are instantaneous and as frequent as you want them to be. Carriers are now using networks such as Facebook and Twitter to communicate to their insureds. Claims can be filed directly from smart phones. These forums can be a way to keep not only insureds but also your staff informed. Sometimes in the aftermath of a storm, however, these media outlets are not available. Thus, you must revisit the basics.

Back to Basics

One of the basics is to ensure that your phone tree is updated. More often than not, the list is outdated. When you need to contract someone, valuable time is wasted when you don't have the correct contact information. Phone trees are critical as you plan conference calls to discuss pre-storm planning and during the event's aftermath to ensure all are kept in the loop on what is happening. This is a critical piece of the puzzle.

Next, determine who will be present to inspect the damage. Prior to the storm, it's crucial to understand who is available to be deployed and for how long. It is recommended that a list be maintained about whom, when, and for how long each adjuster can be counted on prior to the event. This is important as you make assignments and grasp the magnitude of the damage and how far-reaching it is. Those early commitments don't always follow through, so always be prepared with a back-up plan.

Depending on a company's size and how many policyholders may have suffered damage, you might find the need to bring in temporary help to handle some of the inside claim volume that is certain to come. This could come in the form of increased phone calls, claim processing, managing payments, and documenting claim files.

It is prudent to contact temporary staffing agencies now so they understand the qualifications and specific knowledge that your company requires. Once you are tracking the storm, contacting them again and ensuring you are on their list for help is a good idea. I have found it is best to overstaff early on, in case some don't work out or if some have other opportunities and exit during a critical time.

There is much to be done when reviewing your plan. Tasks include obtaining current policy-in-force (PIF) information, determining who will handle the claims on-site, securing hotel rooms and rental cars, supplies, ladders, and, yes, even immunizations for those who will be in the field. Communicating to all within your company and ensuring your customers are receiving the services they so desperately need is critical.

Obtaining updated PIF information in the strike zone is another important process to understand. This information is used to determine how many customers may have suffered damage, allowing you to assess the proper staffing levels needed for a quick response. This also provides information to the leadership team as to the expected losses that might be incurred and the length of time the claims may be pending. To have this information available to both the insurance company's staff and its independent adjusting partners will prove to be a valuable asset throughout the event.

Identify Your Allies

Most carriers do not have the staff necessary to handle day-to-day claims and a catastrophe such as a Category-3 hurricane hitting a metropolitan area. They must turn to the assistance of their partners: independent adjusting companies, mitigation contractors, housing vendors, and contents vendors—just to name a few.

The independent adjusting companies will be one of your key players. Now is the time to ensure you have enough coverage based on your projections for any given area. The adjusters should be trained and certified to handle your claims based on your policies and procedures. Training early will expedite the claim process later on and avoid issues once the claims roll in.

When the hurricane or other disaster strikes, whom will your customers call to file claims? Do they know? What web page will be used to log on? Is there a mobile catastrophe unit in the area? All of these questions may not seem important in April or May, but nevertheless become a top priority when a hurricane strikes. An old but effective means of communication is advertising. Print and radio ads are an important means to communicate in the aftermath of a storm when no electricity exists. Make sure you know the local radio stations and news outlets prior to the storm. Have your ads ready and your contacts in place now. Placing signs in the affected areas with contact information after the event is also an old but effective way to reach people. Other technology should also be explored, like sending voice broadcast messages, e-mails, and as mentioned before, using the social networking media such as Twitter and Facebook.

Where are your adjusters and catastrophe teams going to stay? Do you have a plan in place to secure housing? During a catastrophic event, hotels are at a premium and are likely scarce, at least those with water, Internet access, and electricity. You should have primary lodging and contingency lodging arrangements ahead of time. Housing partners are a great resource for this critical piece.

States have differing licensing requirements for both staff and independent adjusters. Ensure now that your adjusters have the necessary licenses. Sure, emergency licensing can be requested at the time of a disaster, but what if the Department of Insurance is closed because of the hurricane and their contingency location won't be operable for a week? As the storm approaches, the CAT manager or a designated individual should be reviewing what each state requires and align the response staff accordingly.

Preparation Is Key

Each geographical area is different. Training the staff to understand varying state regulations and local building material codes is critical. A preliminary training overview should be performed within one to two months prior to hurricane season so that all of your adjusters are properly trained to handle claims. A second training session should be done when the storm makes landfall and your adjusters are in place.

An on-site orientation for each adjuster—whether staff or independent—is another crucial strategy to ensure success. Whether in person or via Web, give them an overview of what to expect, such as the type of damage, type of building materials, construction, inaccessible areas, and virtually anything and everything that will help your adjusters during this time.

A "mock drill" is an effective way to be certain that you have gone through each step of your catastrophe plan. For instance, plan a fake "hurricane." Each member of your team should move through the process, from when the first tropical storm warning is issued to the point at which the hurricane makes landfall, and through the next few days thereafter. Everyone should know what they need to do, as well as when, why, and how.

Remember to take care of your staff, as they are taking care of your customers. Stress levels and work conditions get tough for both your on-site and home office staff. Therefore, make a concerted effort to treat your personnel well. Arrange to bring meals to them, bringing management to the off-site locations, or just offer a simple thank you.

Even when the storm has hit, the claims handled, and your catastrophe office is ready to be shut down, you're still not done. What did you learn? What did you do right? What could you have done better? All of these questions should be reviewed immediately after the storm. Assemble your key players in one room and openly discuss all points of the event to learn from mistakes and from each other.

Each and every day, those in the claim business handle thousands of claims and do it with the mindset of empathetically helping those in need. When a catastrophe occurs, there is a lot more focus, oversight, and demands placed on all parties involved. There is no better time to take care of your customers than during a large catastrophe. Delivering on the promise that you will be there when they need you most starts with proper planning. As such, you can never be too prepared.