helping a community return to normal
And the adjuster?
Parametric covers do come with some
significant benefits for insurers. In particular, they aren’t tied to the insured’s loss
experience. The cover would be triggered
by an objective, independent number,
greatly reducing the time and effort associated with paying a claim. Think about a
policy triggered by the number of fatalities from a terror event. Based on the reporting agent named in the policy, there
may be a claim payment in the event of
an incident that results in 100 fatalities.
After the event, if the reporting agent indicates there were at least 100 fatalities,
the claim would be paid.
So, what’s missing from this scenario?
• Validation of any facts regarding the
loss from the insured
• Use of lawyers and forensic accoun-
tants to ascertain the extent and value
of the loss
•Hours of interviews with claimant
employees and other stakeholders
• Piles of notes in the claim folder that
could wind up in dispute (or at least
• Multiple site visits over a period of
months or longer
And what else is missing? Most of the
loss adjustment expense. An insurer
can handle the claim quickly and fairly
easily, having adjuster time for those
scenarios with particularly thorny
challenges that somehow potentially
slip through the cracks of a well-struc-
tured coverage trigger. Nevertheless,
claims handling becomes focused on
the deployment of skilled and experi-
enced resources to where they’re need-
ed most, rather than to every claim that
comes in the door.
At a minimum, insurance needs to
follow the risk. And with the shape of
terrorism changing, it’s time for the industry to develop solutions that help
corporate insureds move risk off their
balance sheets. This does more than
help insurers maintain their relevance.
It offers an opportunity to deploy more
capital, attain profitable growth, and
generate shareholder wealth — all of
which have become difficult in recent
years. Resolving loss settlement arising
from the emerging terror problem benefits everyone.
Tom Johansmeyer is assistant
vice president of PCS strategy and
development at ISO Claims Analytics, a
Verisk Analytics (Nasdaq:VRSK) business.
Ted Gregory is director of PCS operations
at ISO Claims Analytics.
Don’t miss Larry Mason
speak on “Emerging CGL
Risks: Coverage Issues”
at the PLRB 2017
Claims Conference in Boston
on March 26–29th.
Learn more at www.smsm.com
AUSTIN | CHICAGO | DETROIT | JERSEY CITY | NEW YORK | PHILADELPHIA | ST. LOUIS
We make the complex simple.®.
A Simple Concept:
Insurance industry clients, both international
and national, turn to Segal McCambridge
Singer & Mahoney when they need a clear
understanding of a complex insurance coverage
challenge. We make a thorough and objective
determination of whether a claim is covered and,
when appropriate, protect the interests of insurers
and reinsurers in litigation and defend claims
against insureds of all types.