Although last month's Hurricane Lili did not wreak as much damage as some expected (despite estimated insurance costs of $335 million), insurers' technology-enabled front lines of catastrophe response were prepared for the worst.
Major carriers with significant exposures deployed their CAT (catastrophe response) teams to southern Louisiana. For instance, Prudential Property & Casualty Insurance Co., part of Newark, NJ-based Prudential Financial ($371billion in assets), deployed its PRU-CRU (Catastrophe Response Unit) motor home. The fully functional office, running on a Windows NT network that can connect to Prudential's systems through dial-up or satellite connections, can process claims and issue claims checks. "We make a decision to deploy the team based on the category of the hurricane and projected path," says Joe Pecoraro, CIO, Prudential P&C.
Also, Travelers Property and Casualty (Hartford, $14.3 billion 2001 net income) sent a CAT van to the area complete with land lines, satellite and cell phones and a policyholder database on CD, and equips its adjusters with laptops so they don't have to come to the office to receive assignments, says Ray Stone, vice president of catastrophe operations. "Our adjusters' laptops are equipped with software so they can retrieve assignments and process the loss."
In addition to equipping claims units to work remotely, insurers also equip call centers to handle increases in call volumes. In 1996, Farmers Insurance Group (Los Angeles, $12 billion total assets) created a centralized CAT response unit that has 100 permanent employees and can quickly ramp up to 300 if a disaster strikes, says Mark McKee, national catastrophe claims manager. "Most recently we created a centralized call center for claims, a true one-stop shop," he says of the operation that can not only take first notices of loss, but can also book hotel rooms for people who lost their homes and service any stage of the claims cycle.
Nationwide Insurance operates four call centers and has the ability to quadruple capacity in the event of a major event, reports Kevin George, director of catastrophe management, Nationwide (Columbus, OH, $24.5 billion in assets).
In the future, carriers are considering enhancing CAT technology in a number of ways. "We are looking to add mapping technology so we can contact insureds in areas where we know there has been a weather event," says George. "If we know there was a hail storm and we can map which customers may have been damaged, we can proactively call them."
Prudential is looking to increase the bandwidth of its CAT mobile home so it can have more processing capability to handle claims faster, Pecoraro says. And both Nationwide and Farmers are looking at adding wireless technology, although executives from both firms say bandwidth and security concerns must be addressed.
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio