What happens at an insurance company when disaster strikes?

The last time you watched a disaster unfold, what were your first thoughts? It probably wasn’t “what are insurance companies doing to help?” But the reality may surprise you…

When a major storm, flood or fire is reported in the media, insurers tend to only warrant a passing mention, and even then, it's typically about cost. But as a disaster unfolds—well before it strikes in some cases—an awful lot starts going on behind the scenes at insurance companies like RSA. 

 

Shifting into high gear

Insurers continually plan for disaster scenarios. At RSA, we have a tried, tested and continually reviewed 'surge plan' in place to ensure that we can give our customers the help they'll need quickly. Key people in the company and suppliers are put on high alert. Damage forecasts or assessments are started. Where multiple locations are affected, employees are moved to the places they can be the most help. The number of call handlers is boostedif the crisis strikes over a weekend or holiday, like the floods that devastated parts of England over the Christmas 2015/16 period, claims handlers are called into work. 

We have a window of opportunity, particularly with fire or flood damage

Jeff Hosking Head of major damage claims, RSA Insurance Group

Some major weather eventsstorms and severe cold snaps, for example—can be predicted and planned for in advance. We use a number of advanced meteorological services to monitor weather conditions that could impact our customers. By combining weather warnings with our geomapping tools we can see ahead of time where a problem is likely to be, how many customers could be affected and whether those customers are residential or commercial.

Unfortunately, floods—flash floods in particular—remain notoriously difficult to predict, but knowing that heavy rain is on the way can put our surge team on notice.

Statistics from the ABI on the UK floods of 2015/16

  • 22,000

    Claims registered, including 5,600+ from businesses and 6,700+ motor claims

  • £50,000

    Average cost of a domestic property flood claim

  • 3,600

    Families helped into alternative accommodation paid directly by insurers

Primed for action

The decision to move to red alert, with everyone primed to swing into action, is judged on the forecast severity of the weather event, risk to the public, the number of customers likely to be affected and past events.

When the town of Fort McMurray in Canada had to be evacuated in 2016 because of a wildfire, insurers were on the ground within a day. That's because having a presence helps us get in touch with customers and co-ordinate a response with local officials and other insurers. It's key to being able to get to work, fast. 

“We have a window of opportunity, particularly with fire or flood damage. We look to stabilise the damage within three days maximum.”

Jeff Hosking, Head of major damage claims, RSA Insurance Group

In countries that RSA operates in, we maintain networks of nationwide suppliers to make sure that expert tradespeople and equipment can be on the scene as quickly as possible. Keeping those networks up-to-date, with the very best suppliersin terms of customer service, ability to react to large-scale and emergency situations, and cost (important for keeping premiums low)is a task that happens all year round.

 

Being where we're needed most

In the UK, RSA has a mobile office, or emergency response vehicle (ERV), that we can deploy to the areas that need it the most. We'll liaise with local councils to find a central and easily accessible spot for the members of the community, so that anyone affected by the event—not just our customers—can visit to have their questions about getting help from their insurer answered by an expert.

RSA's emergency response vehicle, or ERV, is a mobile office that can be sent to communities most affected by a major event. Anyone, not just RSA customers, can visit for help making a claim.

Craig Monks, RSA national events coordinator, travelled with the ERV to Carlisle during flooding in December 2015. He met one man whose home had flooded overnight, and if that wasn't stressful enough, his wife had given birth to their first child at 6am that morning.

“The poor fella was in a state of shock. His wife and newborn daughter were ready to leave the hospital, but where were they going to go to? With the help of our adjusters and suppliers, we arranged alternative accommodation for them the same day. We also got restoration and recovery suppliers in place and emergency payments made. Their house was still flooded, but the family had a few less things to worry about.”

 

Offering reassurance as well as practical help

Being caught up in a disaster is, thankfully, something that many people won’t ever experience and if they do, it will almost certainly be an exceptional event. Dealing with the immediate priorities of where to sleep, where to get hold of a change of clothes, how to access cash for food or fuel, is hard enough let alone trying to navigate the process of making an insurance claim.

This is where having highly-trained claims teams is so important. RSA’s claims specialists can arrange for emergency payments to cover immediate and unexpected costs, like buying food and new clothes. They’ll ask all the right questions to find appropriate alternative accommodation for you, your family and pets if you can’t go home. The same applies if your business has been affected—claims teams can help find alternative trading premises as well as covering lost stock and revenue.

Most importantly perhaps, is that they can tell the customer about every step in the process: what's going to happen next, how long it is likely to take and where to get additional help and support.

Keeping everyone informed

Continual, clear communication is key to reassuring people and when a large-scale event happens there are lots of different groups of people we make sure we talk to.

As well as speaking directly to customers through our claims team, we’ll post practical information to help them prepare or recover from a major event on our websites and social media profiles.

Play video
'How to prepare for a storm' is a light-hearted but informative film produced by RSA Canada for their customers.

Our press teams will make sure national and local media are kept up to date with an accurate picture of the situation on the ground. They’ll also talk to local MPs and government bodies to work out how to best coordinate help efforts.

We also make sure all our employees and key suppliers know what’s going on so they’re better prepared to do their jobs—while also offering help to any of them directly affected by the crisis.

The Prudential Regulation Authority (PRA)—one of the bodies that regulates the insurance industry—needs to be kept informed on our efforts to keep our financial and ethical promises to customers.

Finally, reinsurers (our own insurers) and investors are among other groups of people that need to be kept in the loop so they have enough information to make informed decisions with respect to their own businesses and investments.

Learning from every crisis

For insurers, preparing for large-scale claims events is a continual process that doesn’t stop when the latest crisis has passed. RSA’s unique 310-year history can be attributed in no small part to being committed to learn from every crisis to make our next response more efficient and effective. At the end of every surge response, we ask ourselves: what went well, what could be improved, and what would make customers’ lives easier next time?

We’ll also try to help customers who’ve had to make a major claim lower their chances of being affected by a similar event again or, failing that, lessen the potential impact of a repeat event.

Our view is, if we reasonably can, why wouldn't we turn something quite painful for a customer into something that could benefit them?

Jeff Hosking Head of major claims events

For homeowners, it could be as simple as advice about how not paving the garden can lower flood risk or slightly raising the height of kitchen units and electrical sockets in a home that’s at risk of flooding.

“There have been instances where we've moved factories from one county or even country to another as part of the restitution process, in order to minimise the risk of the same crisis happening again.” 

Jeff Hosking

 

There's a lot going on behind the scenes

So the next time you hear about a major incident, as well as sympathising with the people affected, perhaps you can also take a little comfort from knowing that insurance companies, and all the people that work in and with them, have shifted into their highest gear.

There’s a lot going on behind the scenes to make sure that our customers get the best and most appropriate help as quickly and easily as possible, before, during and after the event.

 

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