Catastrophe Claims: Hard Lessons From Brutal 2011

Claims Preparedness Is a Year-Round Job

By Rick Morgan, Head of Property and Catastrophe Claims, Zurich North America (Schaumburg, Ill.)

The past year has reinforced the need for immediate claims response with the level of expertise that can help customers recover and minimize the disruption to their employees and customers. Because the past decade has seen so much hurricane activity, we tend to focus on hurricanes and think of that as our CAT season. But 2011 reminded us that the CAT season lasts 12 months.

While we still can expect and plan for claims spikes in the third quarter, we really have to be prepared year-round to respond to events throughout North America and, in our case, worldwide. The unusual and very severe winter and spring storms are events that we need to plan for just as much as the late summer hurricanes.

We have seen a large number of severe earthquakes worldwide that are not subject to seasonality. As a result, our CAT response -- always subject to volatility and unpredictability -- must be even more robust and nimble and allow us to respond year-round to multiple events in different geographic regions. This is perhaps the most critical component to our response -- our internal best practices reflect the need to be responsive to multiple scenarios.

Advance work involving creating efficient systems and processes with clearly defined areas of responsibilities is even more critical than in the past. Having our resources and the back-room support lined up and ready to respond immediately remains our top priority in being able to respond quickly to our customers.

The proper technology is important, and we are able to manage our field resources more effectively and make decisions more quickly due to web-based systems that facilitate workflow. Our success as a commercial carrier is contingent upon having specific customer data available to us immediately following an event and -- in the case of a hurricane, where we have some advance warning -- prior to the storm striking. We have made important strides in this area and are working to improve this real-time customer data.