Plan to Plan and React
You would be hard pressed to find anyone in the insurance industry to argue that planning isn’t necessary when it comes to CAT response. Having a plan for any operational initiative is important, so why is CAT planning so different? The reason is that when it comes to a catastrophe – there is a much higher chance that things may not go as planned. I would suggest many that have been part of a CAT team will agree that things will NOT go to plan and it’s hard to predict which way they will go. With this, you should have your second, third, and fourth step already configured and ready to go at a moment’s notice.
It is true that your company’s reputation in the industry is on the line, but your loyal policyholders depend on you to be there for them in their time of need. They rely on you because they selected you as their homeowners carrier and paid their premiums promptly. To compound this, it is also commonplace for the voice of the few upset policyholders to be louder than those of the many that you supported and serviced well through the event. It is these reasons and the obligations you have as a carrier that your plan should encompass the preparations for the storm response, execution during the storm, as well as a post-storm follow-up initiative to make sure the air is clear and that you have indeed performed admirably.
When the storm hits, there may be 24-72 hours before you start to feel the weight of fast-moving reports, and questions coming in. Then in what will seem like a millisecond, the few things that need your attention will turn into a few hundred. Simple things like internal and external point persons, contact phone numbers, phone routing, and even what day of the week it is will become harder and harder to keep straight. Every aspect of your plan should be scripted with contingency versions of contacts and communications trees. It is equally important to have regular touch point meetings scheduled so that you can REACT to changes in workflow, process improvements and efficiencies and anything else that may come along.
You will go into the CAT response with a plan, but every event is different. You can lean on your historical data to help drive estimates on FNOL staff, system bandwidth, and other resource needs but you must learn to use that for what it is…an estimate…and you must also know how to use the real-time data and feedback to drive all decisions as it becomes available. This is why being able to react is essential, but like steering a fast-moving vehicle an overcorrection in steering can be devastating. You will learn many lessons throughout the event, but the most import thing to remember is you are experiencing everything as it comes. You are working with members of your team that are not your primary handlers, and as an organization, your path and momentum is different because of it. This is where having an experienced partner to help you is important not only in executing the plans operationally but in sharing these experiences to make sure your plan is as good as it can be from this storm. One promise I can make is for each storm you respond to there will be lessons learned, and those lessons are different for every organization. Those lessons are just that, but if they are absorbed and documented they will only help you in future responses to come.
More on execution and storm follow up to come in my next post.