A year ago, Superstorm Sandy wreaked havoc in the Northeastern United States, causing enormous and widespread damage in one of the most heavily populated regions of the country. Many families and businesses are still struggling to recover from the devastating impact of the storm.
From the standpoint of insurers, Sandy offered a few technology lessons that might help them better cope with similar events in the future. One company in particular, American Modern Insurance Group, has gleaned some valuable insights based on its experiences with the hurricane and its aftermath.
The company, a business unit of Munich Re, the world's largest reinsurer, is a property/casualty insurer that provides specialty products for owners of mobile and manufactured homes; specialty dwellings such as vacant, rental and seasonal homes; watercraft; motorcycles; collector vehicles; and snowmobiles.
Based in Cincinnati, Ohio, for more than 45 years, American Modern also serves the commercial insurance needs of landlords, as well as dealers and communities within the manufactured housing market. It also provides services and products to protect lender interests, including mortgage fire, debt cancellation, vendors single interest, collateral protection insurance and renters insurance.
Sandy was among the top 10 natural disasters American Modern has had to deal with, from the standpoint of the number of claims filed, says Bob Crowley, VP of claims. The total number of Sandy-related claims stands at 4,285, 97 percent of which have been closed.
One of the biggest technology lessons the company took away from Sandy is that many consumers now prefer to communicate with insurers via their smartphones.
“From an operations perspective, with Sandy [claims] we have seen a significant change in the way our consumers are communicating with us,” Crowley says. “The way folks communicate today is considerably different than just two or three years ago. It really opens the door to different opportunities for carriers.”
Among these opportunities are being able to communicate with customers more via text than with voice, and being more proactive in terms of getting information out to consumers and responding to their questions and concerns as they arise. This allows providers to keep customers informed electronically and eliminates the need for clients to wait for phone calls from the carrier with updates.
Texting “keeps communications more regular and frequent,” Crowley says. “Customers understand the need to wait [for claims to be decided], but they want to be continuously kept informed. And the use of mobile technology opens up that possibility.”
From an internal IT perspective, the increased use of mobile devices and texting for communications doesn’t require any changes in technology, Crowley says. “But as a lesson learned, it makes you think differently about how you communicate with clients, he says. “We have a process in place to automatically send voice communications to people, and maybe we need to change that to text messaging. That seems to be the preference today.”
The company is also increasing its own use of mobile devices in the field. Many personnel already use smartphones and laptop computers, and American Modern is evaluating the use of tablets as well.
The company tries to resolve claims at customer sites whenever possible, and equipping claims personnel with mobile devices makes the process a lot more easy and efficient, because workers don’t need to carry as much peripheral equipment such as scanners and cameras. These capabilities are built into the latest devices, Crowley says.
Another key technology lesson from Sandy is how effective catastrophe modeling—and in particular the geocoding technology component of modeling—is to disaster preparation and claims handling.
The company began using geocoding—a technique to find associated geographic coordinates from other policy data such as street addresses or zip codes—on a limited number of policies a few years ago, and now uses it for all policies.
“Now that we have geocoding on all policies, we can easily graphically display data on a map” to help with claims logistics and enable the company to be more proactive in handling claims, Crowley says.
For example, after a storm such as Sandy hits, the company can use geocoding to see policy exposures on a map. It might show 10 homes on a particular street, with eight of them having claims. Given that the street was so heavily damaged, American Modern can assume a likelihood of there being other exposures in the immediate area, and address those potential claims before having personnel leave the area.
Geocoding all of the policies “enables us to complete an assessment [of potential damages] prior to a major hurricane or other storm,” adds Heather Bolyard, assistant vice president of Claims Services and Information at American Modern. “We use geocoding tools to map information and see data visually. We can more easily determine the amount of risk in planning for an event. And we can see how many exposures there are and how much expertise will be needed,” and whether damages in an area should be assessed by individuals on the ground or via aerial photography.
The company conducts mock catastrophes using geocoding systems, and used the technology prior to Sandy. “It tells us the amount of resources that we need to deploy and the average size of loss we should be anticipating,” Crowley says. “We go through those scenarios to make sure we know where we need to put our resources.”
The geocoding software, provided by SpatialKey, also enables the company to more effectively determine which of its locations on the outskirts of a disaster area will be available to help in the event of cell phone service outages, road closings or other logistical difficulties in the service area.
Another benefit of geocoding, Bolyard says, is that by running mock disasters, the company can help workers get comfortable with the types of decisions they will need to make in the event of an actual event such as Sandy. While the hurricane was not the first weather event in which the company used geocoding, it was the first major event, she says.
Sandy also reinforced the value of aerial photography in assessing an area both before and after an event such as a hurricane. American Modern is considering using firms to conduct flyovers prior to and following hurricanes. Generally, photos of the area are available within 48 hours after the flyover.
With this technology, “you can see what the risks were prior to the storm and then see [the actual damage shortly afterward], so you see a before and after view,” Crowley says. The aerial views post-storm can help with triage, enabling the company to deploy resources in the most critical areas first.
Hurricane Sandy also made it clear to American Modern how important it is to get the right data to the right people in the field.
“One of the challenges we had was there was so much information available during Sandy, and we had to be able to go through all that information and get that to our adjusters and insurers,” Bolyard says.
Adjusters had to cover a large area that included metropolitan New York, so American Modern had to keep people informed of developments such as bridge and road closings and when workers could get into certain areas to conduct assessments.
Coordinators were able to quickly disseminate key information to their teams through bulk text messages, emails directly to smart phones, and desktop share to visually review information together.
“Technology is rapidly enabling insurance companies to improve their catastrophe claim response models,” Crowley says. “This helps us reach the ultimate goal of improving the customer's claims experience.”
For more coverage on customer satisfaction for claims resulting from Superstorm Sandy, click here.
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