We all know Hurricane Matthew hit the Atlantic Coast hard the weekend of October 9th. By all accounts, Matthew was a significant event but, fortunately, not a catastrophic one. Many homes experienced wind and storm surge damage. Flooding in North Carolina created a more serious impact with thousands forced to leave their homes. Comparatively though, Hurricane Katrina was 6x larger than Matthew in terms of financial impact, according to data from industry sources including Property Casualty 360.
As with most major Catastrophe (CAT)-like events, independent adjusters are deployed (typically by IA firms) to inspect, scope and create estimates for insurance carriers with coverage in the damaged areas. In the case of Hurricane Matthew, there have been reports of many independent adjusters deployed for the event who are entirely new to the industry. Often times, these adjusters have never scoped a claim before. License restrictions are typically lifted in CATs to enable faster response times. That means many adjusters at Matthew may have no relevant industry background. There are a few reasons why so many inexperienced adjusters are being used for this event:
- Beginning approximately 25 years ago, insurance carriers began outsourcing their CAT claims operations to Independent Adjustment (IA) firms and other third party solutions capable of handling the unexpected nature of surge events. Those organizations maintain limited, full-time staff and medium to large rosters of IAs who are deployed during large, CAT-like events. Given limited surge events, many of those rosters have been depleted and are no longer current.
- Prior to Hurricane Matthew, the last event of such significance was Hurricane Sandy, almost four years ago. The US hadn’t experienced a direct hit hurricane in over a decade. There simply has not been enough “surge” events to go around for many trained adjusters to maintain a steady work volume. So, a number of those folks took on different roles or left the industry altogether.
- Over 43% of the current workforce in the insurance industry will retire within the next 10 years. Senior, experienced adjusters are less interested in being staffed on CAT events today. During a CAT, an adjuster can expect 12+ hour days, seven days a week, for weeks at a time. The intensity and nature of the work is simply unappealing to many in the workforce today.
Some firms use inexperienced resources to meet carrier SLA requirements for first inspection timelines. But, in those cases, it’s likely there will be a series of re-inspections necessary to fully resolve a claim. The “can has been kicked down the road” so to speak. So, the process and timelines have only been extended and the policyholder is likely to become impatient and frustrated with a series of intrusive home visits.
Spex has been used by new and experienced adjusters to support hundreds of Matthew claims. It will be used by more restoration contractors in the weeks ahead as inspection and scoping efforts move to the recovery phase. Spex users are being trained faster, inspecting faster, collecting more inspection documentation and are reducing cycle times on the properties they manage. In many instances, Spex users are effectively taking a tablet out of a box, turning it on and following a series of protocols to systematically inspect a given property. We’re repeatedly hearing that new Spex users become familiar with the solution after only a few projects. In a CAT, that’s typically less than one day’s work.
Whether its Spex or solutions like it, technology must be at the forefront of CAT claim handling going forward. How can an industry, where customer satisfaction relies on speed and efficiency, survive otherwise? There is no way to prevent the exodus of skilled, knowledgeable workers leaving the industry. Technology must be used to scale knowledge and training.
An individual deployed for Hurricane Matthew recovery may be inspecting a roof for the first time ever this week. And, they may be handling all kinds of foreign claims environments in the days ahead. But, that’s a manageable situation if the person is using thoughtful, effectively configured technology to drive the inspection process. Forms, protocols and conditional logic solutions are all means to standardize the workflows. If the person is able to sync inspection data back to a qualified, experienced desk user, that administrator can then build estimates, write denial letters, and accelerate the resolution process.
With a changing workforce and events the size of Hurricane Sandy inevitable in the future, a team handling approach to CAT operations using mobile first technology appears to be the only path forward.
CEO of Spex