How Technology Advances Natural Disaster Response
Natural disasters seem to be occurring more frequently in recent years and create a backlog for property and casualty insurers who want to ensure policyholders recover and stay ahead of the next event. Insurers are increasing their reliance on technology both pre- and post-catastrophe to support their policyholders.
Amid the emotional process of assessing damages and developing a recovery plan, policyholders turn to insurance providers for guidance during the process from start to finish. Insurers are essential in mitigating policyholders’ losses quickly and efficiently to maintain customer satisfaction. Today, technology plays a critical role in this process.
Before disaster strikes, insurers are both the expert and safety net for policyholders, who rely on them to prepare for the unlikely event. Therefore, insurance companies must have the technology to understand and protect people before and after claims are filed. This involves employing digital tools to better navigate, understand and utilize the data they collect.
Many large carriers today have established their own advanced catastrophe forecasting and monitoring capability. Several well-established third parties also provide similar services to carriers who cannot practically develop the same level of sophistication. The most forward thinking among them are using these capabilities to better protect their policyholders from loss.
Carriers, directly or through their brokers and agents, are improving guidance on coverage based on a better understanding of risk for potential catastrophes, as well as the risk from an actual catastrophe. Catastrophe (CAT) modeling, using computer-assisted calculations to estimate the losses that could be sustained due to a catastrophic event such as a hurricane or earthquake, enables carriers to analyze risk exposure and also helps policyholders understand their own risk.
Development of easy to understand exposure and coverage maps for both commercial and personal policyholders enhances selection of appropriate coverage, reducing surprises in the event of catastrophic loss. These are simpler to prepare with advanced analytic, artificial intelligence (AI) and visualization tools. Coupled with use of high-resolution drone images for risk assessment in certain cases, policyholders are being offered much more detailed information on how they can better protect themselves.
Insurers and agents are also helping with readiness using the same cat modeling data as catastrophic events near. For many weather-related catastrophes such as hurricanes and wind and hail events in high-risk areas, mobile apps augment government and media notices by pushing helpful information such as FEMA and third-party preparedness guides, tips and tools. Agricultural loss is very difficult to prevent but auto and home damage can sometimes be mitigated by leveraging Internet of Things (IoT) capabilities. For example, property assessment using drones and imminent event warnings can remind policyholders to prepare by identifying vehicle location and pushing reminders to move vehicles under cover before major hailstorms.
After a disaster, it is essential insurers provide an immediate response and accompany the insured throughout the process, from the first days of assessing damage and throughout the claim.
Many insurance companies are implementing drone usage to accelerate and improve claim handling after catastrophic events. Typically, insurers would send a large number of adjusters to an area immediately after the event. Although the deployment of adjusters was planned proactively, physically setting up claim adjusters and remote settlement offices still takes time. Drones can be deployed far more quickly and can document the extent of damage with high-quality photos.
Insurance companies started using drones about five years ago, but usage has grown significantly during the last year based on results from recent hurricanes and accompanying floods. Drones can reach areas where adjusters can’t physically go, and the high-quality photos provide details that are difficult for adjusters to duplicate using traditional means. Drones have also reduced the risk of injury to the adjusters. Several InsurTech startups have made drone capability available to insurers who do not have the scale to do so internally, greatly extending the reach of technology in cat claim processing.
As clients begin the recovery process, submitting claims and determining their losses, insurers are using robotic process automation, to support claim processing more quickly and freeing up employees for more complex customer service. Integration of the drone assessment data into the claims process is being combined with improved AI techniques to automate much of the damage assessment. This can be even more highly automated when the initial risk assessment was completed by drone assessment, particularly in the case of agricultural loss.
The ability to compare the risk assessment data with the damage assessment data can take days out of the process, sometimes preventing further business loss due to delay. Insurers are also using technology to manage claim payments more effectively with direct to policyholder account payments using a variety of third party processors.
Improved customer service
Technology use by insurers to better analyze potential policyholder losses, file claim reports, aggregate losses, assess damages and identify policyholders that are in need of humanitarian aid is creating a huge lift in policyholder satisfaction and brand perception. One of the strongest motivators for policyholders to retain or change insurers is the claim experience.
This improvement in claim handling allows agents and insurers to offer creative, empathetic responses and solutions to policyholders, creating a human connection that can make all the difference in customer loyalty as they overcome disasters.
In addition, successful insurance companies are using technology to help accurately assess the long-term impact of a disaster and to reduce costs. AI assistants offer information on policies, claims and billing at any time, providing real-time support and information as policyholders rebuild.
Looking to the future
Natural disasters such as hurricanes, flooding and wildfires can strike even the most prepared homeowners and businesses. Proactive insurance providers who work alongside policyholders as a partner and employ technology to assess damages, as well as quickly identify and communicate with policyholders, will not only better manage costs, but also will improve customer experience and maintain brand loyalty by focusing on the human side of insurance.