Focus now turns to storm claims preparation
© Can Stock Photo / radiantskies
When LMA asked many of Florida’s stakeholders about this year’s reinsurance purchase for hurricane season, the sentiment was that the negotiations started out rocky and the finish was expensive, with the 2023 reinsurance race having the effect of a most likely 20% increase or more at least for all Florida policyholders.
Everest Re Group, one of the top reinsurers in Florida, told S&P Global that price increases were about 20%-25% this season for insurance companies that “coped well” with Hurricane Ian claims, and 40%-50% higher for companies that struggled with Ian claims. London-based Howden Broking Group reported pricing up 33% on average. This marks the fifth straight year of double-digit reinsurance hikes, but availability was there overall. It could have been worse, if not for the 2022 Florida insurance market reforms. “If no reform had been passed, I probably would be deploying a lot less capacity in Florida,” Everest COO and head of reinsurance, Jim Williamson, said in an interview.
So, we’re now in the Atlantic Hurricane Season through November 30. Insurance companies are holding their catastrophe adjuster training now to educate adjusters on their policy language, claims handling protocol and above all, customer service standards that are the highest priority. Consumers are often intimidated about the process. It’s the adjuster’s job to put the consumer at ease and be up front about the process. How a claims adjuster handles a claim on the front end is vital to ensuring the claims journey is successful.
One of the lessons learned from Hurricane Ian is that you can never communicate enough. The more a customer hears from their adjuster and/or their insurance company the better a consumer “feels” about their claim. Carriers are now working on live chats and other technology to continually improve their communication processes. Citizens Property Insurance, for example, is about to institute policyholder focus groups and include the Xactimate add-on called XactXpert on its field adjusters’ tablets and laptops. It will provide adjusters real-time feedback on whether they are preparing a loss estimate consistent with Citizens best claims practices and estimating guidelines. One example: not including items that aren’t covered in the policy. “It will save us time from having to look (at the report) and turn it back over to the estimator for change,” said Citizens Senior Director of Claims Vendor & System Management, Greg Rowe. “It will also make all estimates uniform in appearance.”
The biggest concern now is the potential severity of any storm(s) that come ashore. Insurance companies are planners and exercise their catastrophe plans to the nth degree! But sometimes the best laid plans can have pitfalls. Take for example, the Hurricane Ian claims experience. The Office of Insurance Regulation reports that there were over 700,000 Hurricane Ian claims as of early March and the Department of Financial Services reports that less than 1% of these claimants filed a service request for the DFS consumer helpline to step in. That’s an incredible statistic but we can always do more!
The 2022 and recently enacted 2023 reforms will provide tremendous consumer protection. For example, the Assignment of Benefits (AOB) hustle is over, or so we hope. And third parties that execute contracts with consumers have had to be more transparent and fair in their contracting practices. Our state’s CFO Jimmy Patronis has been a champion for consumers in calling out contractors who have been predatory in their practices. We are all hopeful that the 2023 storm season will be mild in so many ways!
LMA Newsletter of 6-12-23
