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Northeast Insurers Mop Up After Sandy, Face Formidable Claims Challenge

Carriers that have navigated the initial business continuity challenges of Hurricane Sandy are ramping up to deal with increased claims volume as power is restored to policyholders.

Western World Insurance Group saw business continuity planning and investment pay off last week as its Franklin Lakes, New Jersey headquarters was struck with the loss of power affecting large parts of the Garden State. Like other insurers, the excess and surplus carrier dealt with facilities and staff issues last week and anticipates claim volume to increase as this week unfolds. “We’ve done a tremendous amount to be prepared, and we’re fortunate to be in a facility with a great generator operation,” comments Thad DeBerry, senior VP, Information Technology, Western World. “Our data center is protected no matter what, and it never went down for a second.”

Western World’s response was not entirely glitch free, as a the failure of a primary internet provider failed to trigger a transfer to a secondary option. “We thought we had everything covered, but for a time some of our Web-based systems were not accessible to our external business partners,” DeBerry says.

However, that interruption had no impact on the functioning of the insurer’s internal systems, DeBerry stresses. “We have an internally replicated as well as an externally hosted replicated environment, so in the event of water or fire, we have two failovers,” he reports. “Thankfully we didn’t have to utilize either of them this time around.” New Jersey continues to be affected by power outages, blocked roads and gasoline shortages, which DeBerry suggests are postponing policyholders’ filing of claims. “Only once people get power back are they going to say, ‘What to I do now?’ and start calling in,” he says.

Western World expects claims to peak during this week, and the insurer is ready, according to DeBerry. “We are very well represented 24/7 by [Dallas-based] Team One adjusting services,” he says. “They do this for us all the time, and this is when you really appreciate them. They handle off hours and gaps — we transfer traffic over to them and they have the resources available to handle them.”

Torus, a global specialty carrier with offices in Jersey City, saw its lobby flooded with six feet of water that only receded on Thursday, according to Jeff Grange, head of management liability and professional lines. Sandy resulted in the closing of the carrier’s facility until today, as well as difficulties for the company’s staff. However, Torus continued to operate throughout the event.

“We were able to stay online in a vitualized way, and all our employees were working remotely and able to access our systems,” Grange relates. “Aside from personal dislocation for individuals, we’ve seen a terrific example of how a properly built network and sound business continuity planning can work. Our location closed, but our business stayed open and we did not miss a beat.”

[Don't miss today's I&T story on Torus' use of technology in support of business strategy: Torus Leverages Portal Tech for Expanded Small Business Strategy.]

Most of Nationwide’s (Columbus, Ohio) Northeastern offices were forced to close for portions of last week, according to spokesperson Elizabeth B. Stelzer, speaking with Nationwide’s National Catastrophe Team is getting to customers as quickly as possible, according to Stelzer. “This team will work 12-hour-days, seven days-a-week until all policyholders’ needs have been addressed,” she says. “We’re addressing our hardest-hit policyholders first. Claims associates will also focus efforts in those communities with the greatest concentration of damage.

“Claims associates are in the field responding to claims and have the ability to, in certain situations, produce a check or pre paid Visa card on the spot,” Stelzer adds.

[For more on Hurricane Sandy's lessons, see Sandy Illustrates Need for Better Claims Mobility: Aite's Applebaum.]

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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