The problem with extended response time after a natural disaster

A published white paper points out a fact that of which you are likely aware. The insurance industry is feeling the strain caused by the recent series of natural disasters. This is true even though the industry has shifted from a reactive approach to a proactive one since Hurricane Andrew made landfall in 1992.

Today, the industry’s attitude toward dealing with natural disasters is fueled by the development of much more sophisticated technology, fully formulated catastrophe response plans, and the realization of the necessity for immediate response. Even so, as natural disasters increase in frequency and strength, carriers must marshal their limited resources to reduce the amount of time it takes to respond to the pressing needs of policyholders.

The best way to quickly respond to claims arising from a natural disaster is to rely upon an on-demand workforce. That’s because this nationwide workforce of skilled individuals can be scaled up or down at a moment’s notice to empower adjusters to do their jobs faster and more efficiently.

The problem of extended response time

It can take six weeks or more for policyholders to receive payouts on their claims after a catastrophic event. That’s because it takes far too long for carriers to assess claims and initiate payouts. As you can imagine, the time between the catastrophe and when they are made whole is extremely stressful for policyholders.

To make matters worse, a stale claim is an expensive claim. That’s because damages may worsen over time. Additionally, claims that could have been resolved peacefully may end up in litigation as policyholders get angry from waiting. One way to control costs – and keep policyholders happy – is to reduce the time it takes to get money in the policyholder’s hands so that they can begin the recovery process.

The lack of adequate resources

The major cause for delays in assessing claims and making payouts is that carriers are suffering from a lack of adequate resources. Quite simply, during a natural disaster, there is a huge number of claims and a limited number of adjusters to handle them. Carriers understand the value of in-person asset inspections. However, maintaining an infrastructure capable of quickly completing these inspections in any location can be cost prohibitive for most carriers.

The underlying problem is that carriers lack the ability to quickly ramp-up staffing to appropriately service the volume of claims that result from a catastrophe. Whether it’s carriers having enough trained staff to triage claim intake or enough insurance adjusters managing a portfolio of claim appointments across impacted areas to visit loss sites, the capabilities of the industry will continue to be tested.

Final thoughts

Fortunately, by leveraging the on-demand workforce model, insurers can assess claims and initiate payouts after natural disasters strike with greater speed and efficiency. Also, relying upon affordable on-demand workers means that insurers can reduce response times because they can instantly scale up their workforce when disasters strike. Likewise, they can scale down when a large and expansive workforce is no longer needed.

For carriers that are feeling the strain caused by natural disasters, the on-demand workforce model is the answer. Not only is the workforce scalable, but it’s also everywhere carriers need to be.