PCS report examines approach to managing U.S. personnel during peak periods of catastrophe claims

Major catastrophes frequently mean longer hours and extended periods away from home for claims staff on catastrophe duty, but approaches to managing and compensating these workers in the United States vary across geographies, company size and employee rank, according to a study released on Wednesday by Property Claim Services (PCS).

The Catastrophe Compensation Report surveyed 77 property & casualty companies across the U.S. about their approach to managing personnel during peak periods of catastrophe claims, PCS, a Verisk Analytics business, said in a press release. The report covers staffing levels, pay, additional incentives and rewards, overtime and compensatory time off considerations and is the first time the labour cost of catastrophe claims has been assessed, PCS said. [click image below to enlarge]

“The Catastrophe Compensation Report contains a high level of detail about how employees engaged in catastrophe duty are currently compensated in the United States,” said Joe Louwagie, PCS assistant vice president, in the release. “It provides direction on ways to stay competitive with U.S. catastrophe pay scales based on company geography and size. This information can also help guide the global insurance market in shaping catastrophe claims management and compensation policies.”

The aggregated report breaks down the average daily and weekend rates along with a geographic breakdown, which revealed that the lowest average catastrophe pay rate was in the Northwest part of the country, while the highest average daily weekday rate was in the Northeast and the South. Furthermore, the “top 25 ranked property/casualty companies” have the highest weekend rate, although their weekday rates are below the top 100 ranked companies. Top 100 ranked companies are also the group most likely to offer bonuses and compensatory time off, the report revealed.

Sixty percent of respondents said that catastrophe pay is not offered to managers. Of the 31% of companies that offer compensatory time off to staff on cat duty, 92% provide it to managers, but only 25% provide it to dedicated cat team employees.

Within the companies that pay bonuses for cat duty, 54% give bonuses to managers, but only 38% give bonuses specifically to cat site management.

The report also found that property claims departments are not the only area under pressure during catastrophic events. Seventy percent said their companies draw support from departments other than property claims to assist with cat duty, with underwriting (54%) and non-claims customer support (51%) being the departments most frequently called upon.

While field catastrophe staff expect to work long hours to handle claims during a catastrophe, the PCS Catastrophe Compensation Report found that 58% of companies also require inside adjusters and support staff to work extended hours. Half of the respondents said adjusters who are not on catastrophe duty are given extra compensation for completing claim-heavy non-catastrophe workloads when resources are thinly stretched.

Other findings include:

• For most companies, compensation policy varied among exempt versus non-exempt employees;

• Fifty-three percent of firms represented in the survey require employees working catastrophe duty to work on holidays; and

• Companies varied in use of a full-time, dedicated team of inside adjusters to handle catastrophe claims, and more than 50% use independent claims adjusters to handle overflow inside cat claims.

The Catastrophe Compensation Report is the first in a series of catastrophe claims benchmarking reports to be published by PCS.