During this time of the year, over the past decades as a consumer and claims professional, I’ve experienced frequent reminders that hurricanes are a reality and we should prepare ourselves to potentially be impacted. Consumers are not alone in the preparation. Insurers also spend this time of the year preparing themselves fiscally with their reinsurers for the treaties they believe will be needed if their policyholders are impacted. Insurers also ensure that they have finalized their CAT plan to include resources, tools, actions and business continuity for when and if the time comes.
As a C-Suite claims executive, I was asked every year by reinsurers and investors the classic question: “What are you doing to ensure you have adequate resources in the event of a CAT?” My answer was not about Letters of Guarantee with my adjusting firms and service providers, nor was it about the technical expertise and experience of my claims staff, nor that we use drones. Instead, my answer was: “I pay my adjusting firms and contractors timely, especially in times of volume.”
Why is that important? If I paid an adjuster or service provider the contracted amount and paid it within a week or two after the estimate was completed in a time of volume, it garnered a high level of commitment from my adjusting firms and contractors. This differentiated my company from other carriers and, as a result, I found myself always able to obtain the resources I needed, and never having to be victimized of price hike in the middle of an event because I could not pay on time. I operated in the same sentiment as the words of the president: “if your business is not a brand, it is a commodity.” I knew that if I did not differentiate myself from other carriers trying to compete for resources, I would struggle as they did.
The situation has not changed in the industry. Scalability is amongst the utmost of challenges for carrier claim organizations as well as claims service providers. Even today there are carriers who do not subscribe to basic industry tools that are essential in writing damage estimates and providing scalability in the assignment process. As both carriers and providers finalize their CAT plans, I suggest that this year and moving forward, you make sure that the following are included and addressed:
- How will you provide scalability to your back-office operation? It’s simply not enough to say you will pull staff from the Underwriting department or use the “friends and family plan” to come in on weekends and help process invoices and payments. Instead, look to automation. There is software out there that is easy to access and is already integrated with common estimating platforms that you use today. This automation should also be able to be integrated with accounts of record software that is commonly used. Imagine invoices created, submitted and guaranteed accurate within minutes of when the work is completed.
- How will carriers pay invoices in a timely manner, so service providers can pay their own workers as well as the overhead costs they incur from a volume event? Again, look to automation. Claims providers and carriers have access to software that can automate this process on both ends – especially useful in times of volume.
- What about data? Imagine having such automation that collects claim, damage and expense information. Benchmarking reports, ROI analysis and other trends can be easily identified to add better business intelligence regarding the carrier and provider relationship.
Wouldn’t you prefer to pay and be paid as soon as the work is completed? Take the opportunity in this CAT season as a carrier and a provider to stop being a commodity, and start being a brand.
By: John Langowski, Chief Strategy Officer