The industry can be thankful that Sandy wasn’t as strong as Katrina. She could have been a lot worse.
It was late-October. Our Catastrophe unit was about to breathe a sigh of relief. The peak of 2012’s hurricane activity seemed to have passed. The end of the tropical storm season would be here soon, December 1. And then Sandy appeared …
Soon after Sandy formed south of Jamaica, we began to take precautions. Adjusters were placed into a stand-by status just in case this late season storm became a threat. Daily preparatory meetings began to be held.
Various scenarios were examined to assess Sandy’s possible impact. She could turn out to be nothing … or she could be a really bad storm. To play it safe, arrangements were made for an Induction Center in Richmond, Virginia. If we deployed, adjusters from across the U.S. would report here first to be processed into any storm operations.
Sandy was still off the coast of Florida when we activated the first group of approximately 100 adjusters. An Induction Team consisting of specialists in Compliance, IT, Finance, Human Resources and operational managers would meet this first wave of adjusters in Richmond. The decision to pre-deploy is never an easy one.
If a storm spins out to sea, tens (if not hundreds) of thousands of dollars will have been spent with nothing to show for it. If the storm makes landfall though, the decision is priceless. As the two teams converged, Sandy passed off shore the Virginia coast. The forecast for landfall became more certain. A larger response would be needed. In the next two days, approximately 200 additional adjusters would be deployed to the Richmond staging center. Even more would be sent after landfall.
Soon after Sandy formed south of Jamaica, we began to take precautions. Adjusters were placed into a stand-by status just in case this late season storm became a threat. Daily preparatory meetings began to be held.
Various scenarios were examined to assess Sandy’s possible impact. She could turn out to be nothing … or she could be a really bad storm. To play it safe, arrangements were made for an Induction Center in Richmond, Virginia. If we deployed, adjusters from across the U.S. would report here first to be processed into any storm operations.
Sandy was still off the coast of Florida when we activated the first group of approximately 100 adjusters. An Induction Team consisting of specialists in Compliance, IT, Finance, Human Resources and operational managers would meet this first wave of adjusters in Richmond. The decision to pre-deploy is never an easy one.
If a storm spins out to sea, tens (if not hundreds) of thousands of dollars will have been spent with nothing to show for it. If the storm makes landfall though, the decision is priceless. As the two teams converged, Sandy passed off shore the Virginia coast. The forecast for landfall became more certain. A larger response would be needed. In the next two days, approximately 200 additional adjusters would be deployed to the Richmond staging center. Even more would be sent after landfall.
Operations Traditional field adjustment has been the largest segment of our operations. Other adjusters however were embedded into insurers’ operations. Still others worked in off-site fast track units to handle low severity losses by telephone. With most reports moving over the internet, approximately 25 Team Managers have served off-site as file reviewers. A separate group of on-site supervisors focus on coaching adjusters, interfacing with insurers and brokers, and performing reinspections. Two management centers direct ground operations. Large or complex losses are controlled from a permanent office in Manhattan while routine assignments roll up to a temporary catastrophe office in Allentown, Pennsylvania. Overall coordination remains with our head office in Atlanta.
Challenges
Sandy came ashore in one of the most densely populated areas of the U.S. For many insurers, the biggest challenge has been coping with the sheer number of claims, not their severity. The availability of gasoline quickly became a critical problem. With no electricity, fuel stations couldn’t pump gas. Long lines formed at those stations that had power. At least one adjuster told an insured, "I have no gas. If you can pick me up, I can inspect your loss.” (The insured understood completely. He had no gas either.)
Lodging for adjusters was also a problem. Evacuees clogged local motels and many adjusters were forced to travel longer distances to reach their zones. Between the gas lines and the travel times, efficiency suffered in the first 2-3 weeks. Many risks sustained both flood and wind damage. With traditional policies excluding the peril of flood, adjusters had to be proactive to get engineers to examine damages quickly. Their determinations of causation would guide the adjusters. Operating within nine different regulatory jurisdictions has introduced complexity.
Many adjusters have had to secure emergency licenses in multiple states to remain compliant with the appropriate governing body. Technology Each storm has traits by which it can be remembered and Sandy is no different. Chief among these memories will be the role technology played. Losses were in adjusters’ hands far faster than ever before. Through pre-planning with two insurers, their claims were transmitted via an EDI transmission and almost instantaneously placed into our workflow.
The benefits have been enormous. Technology also played a large role in the strategic view of operations, and our Atlanta-based Command Center staff was called upon to deliver information in quantities never expected. The Command Center generates a huge amount of data but it was the analysts that translated this into actionable items for management. Comparative models, run rate trending, key performance indicators, caseload balancing and GIS mapping flowed from the Center at least daily.
Sandy came ashore in one of the most densely populated areas of the U.S. For many insurers, the biggest challenge has been coping with the sheer number of claims, not their severity. The availability of gasoline quickly became a critical problem. With no electricity, fuel stations couldn’t pump gas. Long lines formed at those stations that had power. At least one adjuster told an insured, "I have no gas. If you can pick me up, I can inspect your loss.” (The insured understood completely. He had no gas either.)
Lodging for adjusters was also a problem. Evacuees clogged local motels and many adjusters were forced to travel longer distances to reach their zones. Between the gas lines and the travel times, efficiency suffered in the first 2-3 weeks. Many risks sustained both flood and wind damage. With traditional policies excluding the peril of flood, adjusters had to be proactive to get engineers to examine damages quickly. Their determinations of causation would guide the adjusters. Operating within nine different regulatory jurisdictions has introduced complexity.
Many adjusters have had to secure emergency licenses in multiple states to remain compliant with the appropriate governing body. Technology Each storm has traits by which it can be remembered and Sandy is no different. Chief among these memories will be the role technology played. Losses were in adjusters’ hands far faster than ever before. Through pre-planning with two insurers, their claims were transmitted via an EDI transmission and almost instantaneously placed into our workflow.
The benefits have been enormous. Technology also played a large role in the strategic view of operations, and our Atlanta-based Command Center staff was called upon to deliver information in quantities never expected. The Command Center generates a huge amount of data but it was the analysts that translated this into actionable items for management. Comparative models, run rate trending, key performance indicators, caseload balancing and GIS mapping flowed from the Center at least daily.
Conclusion
Our Sandy operations have slowed down now. Only 5,000 losses to go. Adjusters completing their caseloads are returning home. We’ll soon enter a "clean-up” phase which will likely last much of 2013. Whether you call her a hurricane or a superstorm, Sandy is expected to result in 1.38 million claims, second only to Hurricane Katrina’s 1.74 million. Logistically, Sandy required the same response as the worst hurricane in recent history to hit the U.S. The industry can be thankful that Sandy wasn’t as strong as Katrina. She could have been a lot worse.
NOTE: In a twist of fate, this writer was scheduled to deliver a speech in Manhattan on the day Sandy came ashore. The subject? The Northeast Hurricane; Expected Challenges In Response. Needless to say, the presentation was cancelled.
By Bud Trice, Crawford & Company
By Bud Trice, Crawford & Company
