Top 7 Reasons to Have a Catastrophic Plan in Place
Over the past years, the number of weather-related catastrophes that insurers have had to face has grown – from hurricanes to wildfires and flooding. An insurer’s response in such disasters is critical, and the only way to ensure your response goes smoothly is to have a plan in place. Below are the top 7 reasons to have a current CAT plan in place.
- Improved Customer Retention. Handling claims properly will keep policyholders with you. Claims are often the only real interaction a policyholder has with their insurer. Not handling a claim well will give them a reason to shop and move to someone else.
- Happy Reinsurance Partners. Many reinsurance companies request or require a carrier to have a fully executed CAT plan in place to ensure that they will handle the event effectively and keep expenses, claims and other costs to a reasonable level because you know what the expectations will be during and after an event.
- Clear Direction for Third-Party Adjusters. A well-developed CAT plan will help outside adjusters better understand your expectations. Providing information on potential claims activity, timeframes for when claims are expected, and the longevity of the event’s aftermath will give your vendor partners a clear picture of what is expected to happen.
- Maintain a Positive Brand Reputation. Not planning properly for a CAT event often means more execution and management which can lead to unhappy policyholders, vendor partners, and state agencies. With social media, policyholders that are not getting attention will be the first to bad mouth their carrier to anyone and everyone.
- Enable Your Team to Stay on Task. When carriers are not prepared for the high volume of activity associated with a CAT event, they often end up having to put “all-hands-on-deck” to help with phone calls, assist adjusters or anywhere they are needed. Having a plan, and the proper additional resources in place, means that your team can stay focused during an event.
- Control Expenses. Large scale claims events can quickly create issues for your bottom line. Having a plan to organize your incoming claims, prioritize them, and having adjusters on site as soon as possible helps resolve claims quickly, which helps with keeping down litigation and other legal involvement.
- Control the Process. The key to successful CAT management is to handle claims in a timely and efficient manner. Communicating with insureds around how long the process will take and what is expected of them can help keep you in control and prevent things like calls to public adjusters which can derail your process.