COVID-19 is complicating catastrophe preparation efforts as risk managers and claims professionals prepare for hurricane season, which began June 1, and the summer wildfire season, with traditional prevention and mitigation activities being adapted, rerouted or postponed during the pandemic.
Claims administration has also been affected as adjusters and others attempt, and in most cases continue, to do their jobs within the confines of travel restrictions and other official mandates, with technology helping solve many issues.
From outfitting field staff with personal protection equipment to establishing COVID-19 screenings for claims, the pandemic has brought changes to this year’s catastrophe preparation script.
“We took an aggressive approach and sent out personal protection equipment to all our adjusters regardless of state or jurisdictional requirements, so everybody’s got PPE,” said Scott Richardson, Chicago-based executive vice president, operations, chief strategic & development officer, at Sedgwick Claims Management Services Inc.
The pandemic has complicated loss control activities, said David Gluckman, senior risk control consultant with Willis Towers Watson PLC in Short Hills, New Jersey.
“There are times when you physically need to be on-site at a particular location,” he said. “Clients and insurers, however, have gotten pretty creative with things being done virtually.”
Technology in the form of online meetings and remote applications has helped solve some issues, sources said.
Crawford & Co. established a COVID-19 screening checklist for all incoming claims and found that some policyholders preferred a remote inspection when given the choice, said Kenneth Tolson, U.S. president of claims solutions at the Atlanta-based claims management firm.
One-third of all policyholders participating in the pre-claim screening elected a remote adjustment of their claim, he said. Among the products being used for remote adjustments are phone-based measurement apps.
“What we’re seeing now in the market is an acceleration of (technology) adoption,” Mr. Tolson said, with the outbreak helping drive that adoption. In addition, “you’re seeing carriers move to not doing interior inspections because the consumer does not want people in the house.”
“This event has really helped us push the needle in terms of buy-in for people utilizing technology,” said Mark R. Evans, Hartford, Connecticut-based head of energy, property, construction claims for the Americas at Axa XL, a unit of Axa SA.
About half the people in the claims process, Mr. Evans said, were comfortable “putting an app on their phone and helping us look at losses remotely,” but there was still some pushback and wariness from others regarding what participation might entail.
One risk management concern during past hurricanes and other catastrophes has been the supply of repair resources — everything from nails to adjusters — and “demand surge” when prices become inflated due to material shortages.
But, Mr. Evans said, due to extended periods of inactivity in the construction and related sectors for the past 30 to 45 days, inventories will likely not be a problem going forward as they have not been depleted at the typical pace.
Scott Fouts, vice president in the risk services division for Hub International Ltd. in Charlotte, North Carolina, noted that “wildfire season is fast approaching, also.”
Questions remain over how an evacuation would be carried out within the confines of social distancing, he said. “The question becomes: How do you evacuate people safely?” he said.
Mr. Fouts also recommended checking with vendors of critical services to be certain that they will be able to respond as expected in an event or to what extent they may have been affected by the
pandemic.
The COVID-19 outbreak has also led to the postponement of some ongoing risk management procedures, said Twane Duckworth, chief of risk management for the city of Jacksonville, Florida, and a Risk & Insurance Management Society Inc. board director.
The city has more than 1,400 municipal structures insured, a “large schedule” that includes some unique properties, he said.
The risk management department’s program to continually update valuations with physical inspections has been paused during the outbreak, Mr. Duckworth said, with some facilities closed and many employees working from home and unavailable for site visits amid travel restrictions.
Underwriters, he said, were understanding and said loss engineering could resume as the situation normalizes.
Another issue the city had to address is Florida’s requirement for meetings of public officials, such as the city council, to allow public access
“One of the things we were challenged with was trying to figure out how to continue our operations in the eyes of the public,” Mr. Duckworth said. This was ultimately solved where necessary by using technology such as online meetings.
In addition to preparing for catastrophes, risk managers have ongoing concerns that have been affected by the pandemic, Mr. Duckworth said.
“There are still other concerns we need to pay attention to as risk managers,” he said. “There are other things that have to happen. You’ve got property renewals, other lines renewing. There are things you need to pay attention to and not forget.”
