By Gregg T. Golson, CPCU
Failed CAT plans have costly and long-term consequences including: interest on
late claims payments, unnecessary claims
cleanup teams, loss of goodwill, lack of
retention of insureds, litigation costs, unfavorable court decisions, and potential
bad-faith or punitive damages.
CAT plans fail because they:
CAT plans that
aren’t scalable fail.
Long gone are CAT plans that can rely on
2,500 staff waiting idly for the next event.
Failed CAT plans can force highly-skilled
positions that they’re generally untrained
for and loathe.
Smart companies plan for scalability
depending on: CAT size and type, recent
storms and general storm severity. They
use geographic information systems to
predict claim volume and severity. In this
age of smartphones, phablets, tablets and
social media, insurers still rely on traditional communication methods. Smart
companies enlist tools to seek out data
from social media sites for claims reporting and ongoing claims communication.
CAT plans that don’t prepare
adjusters for a storm fail.
Failed CAT plans rely on TPAs or inde-pendent;adjuster;partners;to;“go;handle
the storm” with little direction and/or
control over quality or expense.
Smart companies train year-round for
storms and build pre-event relationships
with vendors such as engineering firms,
tree-cutters and hotels. William C. Bracken, PE, president of Bracken Engineering
says his most popular training topic for
insurers involves state building codes.
“Trained adjusters who understand
building code basics are better prepared
to identify and properly deal with legitimate code upgrades.”
CAT plans that
aren’t adaptable fail.
Failed CAT plans don’t consider contingencies like the second storm of the season
or lack of infrastructure for connectivity
to Internet-based claims systems. Failed
plans don’t address state-level statutes for
timely contact/follow-up or claims payments within certain time limits.
Smart companies remain adaptable after a storm has made landfall. Paul Neilson, vice president of claims at Heritage
Creating Successful CAT Plans
CAT plans, like strategic plans, tend to be crafted in offices far;away;from;the;adjusters;who;will;implement;them. These voluminous, dust-covered binders sit comatose
only to be revived when an actual catastrophe looms.