BUILDING ON LESSONS LEARNED

Experience from Hurricanes Irma and Maria helps Caribbean insurer prepare for 2019

By Kyria Ali and Donna-Maria de Roche

As an insurer with deep roots in the Caribbean, we have always taken pride in our ability to handle claims with speed, strength, and dignity. Even with this pride and our financial strength, we felt tested in 2017 with what the National Oceanic and Atmospheric Administration (NOAA) called “the seventh most active season in the historical record dating to 1851.”

Hurricane Harvey was one of several to bring death and destruction to the United States in 2017, but it was Hurricanes Irma and Maria that devastated the smaller economies of the Caribbean and Puerto Rico. One of our major reinsurers, Swiss Re, estimates that combined, Hurricanes Irma and Maria led to $132 billion in total economic losses, including $62 billion in insured losses. They say that Irma in particular inflicted “the heaviest economic losses ever experienced in the Caribbean.”

It’s important to us that our clients have access to the best possible advice. Agents and brokers play a critical role in helping people understand how much coverage they need, how often they need appraisals, and what their policies do and do not cover.

While we were committed from the outset to handling this hurricane season swiftly and with integrity, we encountered a number of challenges. In facing these, we learned valuable lessons, particularly with regard to how we engage our independent agents and brokers, who comprise the majority of our property and casualty distribution platform.

Lesson 1: Don’t underestimate the role of digital and social media. Communication is key before, during, and after a hurricane. Even before the storm’s arrival, we were in constant contact with our agents and brokers, as they were with their clients. We also used our website and our Facebook pages to communicate.

We offered hurricane preparedness tips, instructions on filing claims, and a platform on which insureds could file their claims. Ten years ago, we would not have used digital and social media this way in the face of a storm; over the past few years, it has become critical.

The region had limited Internet access during and immediately after the storms, so we weren’t sure if clients would have access to the quick claim notification forms available on our website. We were pleased to note that the online claim forms were widely used, largely because for the many people who evacuated the region, this was the most convenient way to file claims. At the same time, many of those who remained on the islands appreciated the little luxury of not having to commute and wait in a line to be heard.

Building on the success of this tactic in handling claims from Hurricanes Irma and Maria, we implemented the use of online claim notification forms for earthquakes that took place this year in Trinidad and Grenada, as well as the widespread flooding in Trinidad. In preparation for the 2019 hurricane season, we also are preparing to give clients the ability to track the status of their claims online.

Lesson 2: Don’t assume that clients understand their policies. It’s important to us that our clients have access to the best possible advice. Agents and brokers play a critical role in helping people understand how much coverage they need, how often they need appraisals, and what their policies do and do not cover. It’s easy to assume that consumers understand what their policies cover.

In the aftermath of Hurricanes Irma and Maria, we stressed with agents and brokers the importance of documenting coverage conversations with clients. We also recommended spending the extra five minutes to talk to clients about policy terms and asking clients to sign documents acknowledging these discussions. We also emphasized the importance of regularly reassessing client property appraisals, particularly those that cover reconstruction costs.

Lesson 3: Maintain a deep bench of adjusters. After Hurricanes Irma and Maria wreaked havoc on the islands, many of the international adjusters we had previously worked with were preoccupied with Hurricane Harvey in the United States. This meant that our relationships with adjusters based in the Caribbean and with medium-sized international adjusters were critical.

During the 2017 hurricane season, local and mid-sized international adjusters met our needs, but we learned an important lesson: We need to establish and access a larger pool of adjusters.

The authors

Kyria Ali is chief strategy and development officer of the NAGICO Group of Companies (NAGICO), where she is responsible for strategy and business development, performance management, governance, risk management and compliance. Donna-Maria de Roche is chief claims officer of the group, where she is responsible for overseeing its claims handling and management functions. National General Insurance Corp N.V. is a diversified insurance company serving 21 territories in the Caribbean. The firm reports that it has paid more than  $700 million (USD) to its clients in the islands that were affected by Hurricanes Irma and Maria in September 2017 and that as of October 15, 2018 it had settled 96% of the 14,000-plus claims related to damage from the two hurricanes.