even

On Aug. 14, 2004, Hurricane Charley pummeled Florida with winds of up to 145 miles per hour. On Sept. 4, Hurricane Frances, the size of Texas, triggered the biggest evacuation in Florida's history. And on Sept. 16, Hurricane Ivan, the third major hurricane to hit the area in a six-week span, assaulted the Gulf Coast.

Mother Nature is not only a powerful foe, but an expensive one. Insurance industry experts estimate the insured losses to be $6 billion to $10 billion for Charley, $2 billion to $10 billion for Frances, and $3 billion to $6 billion for Ivan - in the U.S. alone.

Insurers often maintain the responsibility for warning their customers and employees about upcoming storms. For Progressive (Mayfield Village, Ohio; more than $11 billion in annual premium), e-mail blasts proved to be a modern Paul Revere. "We actually sent preemptive e-mails to every customer in the state of Florida," says Scott Snapp, Progressive's Florida catastrophe coordinator, of Hurricane Frances. Using its internal DB2 database, Progressive sent 230,000 pre-storm e-mails.

After Charley hit, Progressive found a surprising claims pattern using ESRI's (Redlands, Calif.) ArcView GIS mapping program: The majority of claims were due to vehicles being struck by debris rather than from flooding. The early-warning e-mails, which included tips, may have helped some Frances victims escape similar vehicle damage.

Preparing for Battle

Before each hurricane, insurers had hundreds of adjusters waiting in staging areas to sift through wreckage and assist customers in need. St. Paul Travelers (St. Paul; $107 billion in assets) used a combination of RMS (Torrance, Calif.) modeling and weather forcasting Web sites to track the storms, then loaded policy exposures into Microsoft MapPoint to determine the initial staging of its catastrophe teams. Charley brought them to Tampa; Frances had them in Atlanta; and, after changing course, Ivan led them to Orlando.

"We keep our teams reasonably close to each storm, where it is safe but convenient for us to get into the damaged areas as soon as the weather permits," says Ray Stone, VP of catastrophe management, St. Paul Travelers. "While Frances was on its way, we had well over 100 people in Orlando whom we evacuated to Atlanta until it was safe."

The Aftermath

But the real battle for insurers begins post-storm. For Florida Farm Bureau (FFB; Gainesville; $2 billion in revenue), maps are the weapon of choice. Using Mapinfo (Troy, N.Y.) software, FFB generated macro-level management maps to quickly allocate adjusters by area, according to Steve Wallace, FFB's senior strategic planner.

General Motors Acceptance Corp. (GMAC) Insurance (St. Louis; $1.3 billion in revenue in 2003) sent its RV claims adjusters through the damage armed with an automated assignment program, composed of a Siebel Systems (San Mateo, Calif.) CRM claims handling system that is integrated with FileNet (Costa Mesa, Calif.) paper and document imaging technology, and Hummers, which make it easier to transport the delicate technology. GMAC also provides repair trucks for jobs that can be done on location. "Our mobile storm units have the unique skill of appraising damage and deciding if it can be repaired on the spot," says George Hall, vice president, East claims division, GMAC. "We pride ourselves on identifying the immediate need of every claimant and delivering on that need."

[email protected]