Canadian Underwriter

Paid Catastrophe Response – The New Norm?

May 7, 2020   by Skip McHardy – EVP of CRU GROUP

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Between the industry’s digital disruption and now the practicing of social distancing related to COVID-19, the processes of a catastrophe response, both field and desk adjusting, are undergoing significant changes.

Newly adopted changes have been beneficial to the industry by reducing costs and shortening cycle times. Some, however, have had a negative effect. The indemnity portion, including growing ‘leakage’, continues to rise disproportionally and ‘virtual adjusting’ has uncovered new challenges with a lack of critical empathy to vulnerable customers experiencing significant loss.

Accordingly, CRU GROUP’s Catastrophe Response Unit continues to adapt our model of claims assistance. We are learning to do it all in the ‘new normal’ of the COVID-affected world. Although deploying armies of carrier dedicated people will remain our expertise, we adapt with the times. 96% of our Desk Adjusters are working remotely or from home and we created carrier specific virtual adjusting teams that either inspect or create estimates. Our Academy of Insurance Adjusting division has 60+ hours of webinar-based training. Participation has been great as we teach the guidelines of Business Interruption or Mandatory Evacuation/ALE claims.

There is nothing yet that works for all claims. The biggest factor in getting the loss amount correct is still the skill and experience of the person documenting the damages. We experimented with drones and ‘uber’ documenters, however, with limited results. In a CAT, those services often force a carrier to decide ‘how close is close enough’. Controllable expenses may go down, but at what cost? Drones, homeowner photos, or $20/hr. inspectors, cannot tell an estimator the specifications that are expensive and result in claims being seriously overpaid or generate a costly supplement – an unhappy insured.

Noticing the trends, CRU GROUP developed a version of using expert trained inspectors and remote estimators. We recognized that accuracy would always outperform any model that did not include what we spend so much time learning – correct adjusting. Proven by our estimate scrubbing services we know the benefits of unbiased, licensed and well-trained professionals outweigh the focus on lowering the Loss Adjusting Expense.

While our team deploys in Fort McMurray, we are also addressing the concerns for interior loss inspections. The flooding experienced, after having worked so hard to recover from the wildfire and declining industry, WILL result in shock for some. Although Fort McMurray residents are resilient, they should be considered ‘high risk’ even without the pandemic. Years of empathy training, honed communication skills, knowledgeable building material identification, and most importantly, the ability to listen, are the skills our field adjusters excel in. It is incredibly humbling to have the Waterways residents reach out to our adjusters that assisted them with their wildfire claims experience. Seeing the Alberta community volunteering surely offsets the daily ominous newsbreaks.

Silver linings exist in the pandemic world. Through the 500+ inspections completed since February, our adjusters are reporting that insureds no longer expect instant attendance to a loss with non-threatening, minor exterior damage. Also, because of social distancing, the level of documented communication has increased. Multiple calls to schedule, arrive, leave, and ensure a good understanding of the damages and processes has big benefits to a company. CRU GROUP has also taken advantage of the digital enhancements of new adjusting apps. Technology has given us new eyes but we have not seen anything yet that replaces an experienced adjuster.

We at CRU GROUP do not have a perfect map of where things are going with insurance claims. We do know they will continue to change and having the best – trained and experienced adjusting professionals able to respond and work anywhere will be a pillar to our success.

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