What catastrophic events such as Storm Arwen have taught us about best practice claims management

Gordon Vater 
Director, UK carrier practice 
Gallagher Bassett

Here’s what Gallagher Bassett has learnt about best practice claims management for surge events, such as Storm Arwen

In the wake of Storm Arwen, the latest extreme weather event to hit the UK, insurers across the country are scrambling to respond to an influx in customer claims.

Extensive damage to the electricity network saw around one million homes and businesses, particularly in Scotland and the northeast of England, lose power. Weeks on and thousands of homes are still without power, bracing almost sub-zero temperatures.

The storm has been one of the “most damaging” in 20 years, according to the Energy Networks Association, and experts estimate the repair bill for Storm Arwen could cost insurers more than £250 million. This damage sustained—coupled with supply and labour shortages across the UK—will create challenges for insurers in the recovery and clean-up period.

With a 30-year history of responding to surge and catastrophic events, here’s what we’ve learnt at Gallagher Bassett about best practice claims management for surge events, such as Storm Arwen.

The best response is a prepared response

The best response an insurer can have is a prepared response. A plan is only as good as its performance on ‘game day’, so once disaster strikes, it will be too late to change and improve outcomes.

It’s critical that your organisation’s catastrophe plan has been tested, evaluated and tested again to respond to the ever-changing risk landscape. With global supply and labour shortages rife, this check must include a thorough review and understanding of your supply chain’s catastrophe plans—test and verify through discussion and site visits if required.

We know winter storm season runs from around October to April in the UK and similar severe weather events across the globe follow their own specific seasons, so think ahead and plan as needed to give your claimants the experience they require to remain loyal to your organisation.

When surge events occur, ramp up quickly

The most critical part of the claim lifecycle in a surge or catastrophic event is the rhythm—the decision making, response and the recruiting all have to be fast. The agility at which your organisation can move will be make or break when it comes to a positive customer experience and long-term retention.

Ensure your organisation has the resources to ramp up operations to respond to an influx in claims. This doesn’t mean you necessarily need to go out and recruit in the competitive job market of today, but rather consider how partnerships, technology and other supports could help alleviate some of the pressures in the event of a surge or catastrophic event.

At Gallagher Bassett, we have a dedicated global team of surge specialists who can work with your organisation to respond to an influx in claims, claims backlogs or points of pain—immediately, wherever and whenever you need it.

People-centric and empathetic customer service

In instances of severe weather events such as Storm Arwen, insurers need to remember that their insureds may have lost their homes or livelihoods—so empathetic and emotional connection with their claimants is a must. It’s critical your organisation can manage expectations in the first phone call or touch-point. From this point of contact, you have the opportunity to interact with the sensitivity, empathy and emotional intelligence your insureds crave.

The increasing frequency of surge and catastrophic events

Insurers must not underestimate the impacts of stronger and more frequent severe weather events. A new World Meteorological Organisation (WMO) report has found weather disasters have increased nearly fivefold in 50 years—and this trend is only anticipated to continue as world temperatures continue to rise.

To understand their risk exposure to global warming, insurers may consider adopting climate-specific stress testing—beyond traditional modelling—to prepare for increases in exposure over time. The occurrence of more winter storms or floods may lead to underinsurance—or no insurance at all—so take the time to reprice and rearrange your insureds’ portfolios to follow suit.

Capture your learnings

At the end of the day, no two catastrophe or surge events are the same. Take the time for the future following each event and capture your organisation’s learnings. Adapting your response to what worked and what didn’t work could make the difference for your organisation come next ‘game day’.

Claims Media