A Calm Before and After the Storm: Insurers Doing More than Processing Claims

Last year (2017) was quite an active year for natural disasters and was a true testament of the impact that insurers make in times of need. While claims continue to roll in, 2017 could be the costliest catastrophe loss year in U.S. history.

In 2017, the United States experienced 16 weather and climate disasters, each with losses exceeding $1 billion, totaling approximately $306 billion—a new U.S. record according to the National Oceanic and Atmospheric Administration. Losses from Hurricane Harvey exceeded $125 billion, making Harvey the second costliest storm (just behind Hurricane Katrina) in the 38-year period of record. Hurricanes Maria and Irma had total damages of $90 billion and $50 billion, respectively. Hurricane Maria now ranks as the third-costliest weather and climate disaster on record for the nation, with Irma coming close behind as the fifth costliest.

I recently interviewed Gary Stephen, Executive Vice President for Claims and Risk Management at Privilege Underwriters Reciprocal Exchange (PURE) for an article in The Wire, a quarterly digital magazine for Guidewire customers. We discussed the 2017 catastrophe season and specifically how the insurer prepared for and responded to Hurricanes Harvey and Irma.

Prior to both events, the member-owned insurer dedicated to high net worth individuals and families sent emails to members. The email messages gave members information about how to report a claim, how to access policies, what to do if they had to evacuate, and how they could best protect their homes.

While advancement in analytics and catastrophe modeling enables insurers to better price and risk, it also enables them to help their customers better prepare for these events. And, technology advancement also helps insurers respond faster than ever to customers during and after the events.

“Our philosophy is to get out there quickly and get money in people’s hands first so they can secure a high-quality contractor,” Stephen told me. For Hurricanes Irma and Harvey, PURE took first-notice-of-loss calls with an average wait time of under seven seconds.

With Hurricane Irma, which hit the Florida Keys hard on Sept. 10, 2017, the only bridge to reach the islands was closed. Insurers could not get to the islands, but PURE was determined. “We rented a military-grade helicopter and crew and flew into the Keys,” Stephen continues, “and our adjuster propelled down to the ground to begin inspecting homes days before the bridge was open.”

In times of need like these, many insurers do more than process claims. One such story came from PURE’s Stephen. “With Hurricane Irma, we had a member call us and tell us he had a four-year-old daughter at home who had just undergone open-heart surgery and was still connected to a number of medical devices. But they were running out of power,” Stephens says. “We were able to get propane to them within a half-hour.”

It’s personal stories like this that really made an impact on me while writing the article and make me proud to be a part of this industry.