As the Houston metro area continues to experience the extended fury of Hurricane Harvey, Steve Kennedy, Regional Head of Property, Energy and Engineering Claims for North America, explains how Allianz helps its commercial clients both prepare for and recover from such storms.
** We are ready to support you. Our thoughts are with those who have been impacted by the devastation Hurricane Harvey is causing. AGCS is monitoring the events closely and is ready to respond as quickly as possible and are commited to helping you and your clients. Click here to file a claim **
What is the first step you take after such a storm?
Claims work starts long before a storm or flood hits – it’s about preparing businesses for the worst-case scenario. Our team has been in constant contact with adjusters, salvers, accountants, construction consultants - the experts we’ll need on the ground to report back to us - ensuring they’re in place, ready to go and able to handle the expected claim volume. We’re now deploying a dedicated unit of loss adjusters into the region.
What kind of damages do businesses typically suffer?
Because the damage is so widespread, it is too early to talk about specific claims. However, clearly, flood and property damage from the storm itself are the major threats to local businesses. But property damage isn’t necessarily the main cause of disruption for our clients. Business interruption (BI) losses can also be anticipated, resulting from a loss of power, inability to gain access to premises, or problems with a supplier etc. Such losses can take some time to assess due to their complex nature and often can be higher than the actual physical damage arising from the storm or flooding. According to our analysis of large BI insurance claims worldwide (including non-natural catastrophe events), the average large BI property insurance claim is now in excess of $2m, which is around a third higher than the corresponding direct property damage loss.
What is the biggest challenge during and after a storm like this?
One of the biggest challenges in any catastrophic scenario - is trying to assess damages and calculate losses for our customers, based on limited information. Obviously the storm activity is ongoing which makes gaining access to affected areas problematic. Our primary objective should be to get the client’s business back on its feet as soon as possible, and minimize disruption.
What should customers expect in the next days?
As the water recedes in Houston, our experts will be on the ground, assessing risks. They should expect our staff to be at their site as soon as the water is low enough for us to gain access. Our adjusters will be assessing damage, helping the client with what they need to dry out their premises, determining if there is anything we can do to help in the short term as well as providing estimates on damage costs.
How do you assess the damage? What role does new technology play? Will your assessors be utilizing drones, for example.
While there is no substitute for experience on the ground, in order to keep up with rapid changes in risk concentration, AGCS is increasingly making use of modern technology and models to better aid risk assessment and response when it makes sense to do so. For example, in addition to assessing roof damage, drones can be used to assess in-door damage in larger facilities when water is still present. Drones are also most useful for assessing wind damage claims – and for inspecting inaccessible areas, such as the upper levels of buildings. Satellite technology and 3D imagery means insurers can also locate risks more precisely.
Based on your experience, how long does it take to get things back to normal and what does that depend on?
It really depends on the extent of damage - and in this case - one of the biggest factors is how long the rain will continue. They’ve had a break, but the storm is going to be moving back in and then up through Louisiana. In other words, we need the rain to stop and the water levels to drop so we can get in and begin restoration work.
Depending on how bad the flooding is, it could take six months to get back to normal levels. A smaller risk, with less damage will be operating in a much shorter period of time, such as three to five days. Those businesses with severe damage - it could be months pending how long it takes to order replacement equipment and restore property key to their operations.
What do customers need to do to ensure the claims settlement process runs as smoothly as possible in the aftermath of such an event?
Follow the protocol outlined in the catastrophe response plan. If there isn’t one in place, one should be immediately developed for that event. Ensure there is adequate staff to respond and that there is ongoing communication to include scheduled meetings to discuss progress, as well as issues, problems etc. These can be done as frequently as necessary.