Asking the Right Questions: Is Your Carrier Prepared This Hurricane Season?
Sanjay Godhwani, Executive Vice President and Property Division Executive, Lexington Insurance Company (Lexington), points to current meteorological conditions around the globe that are optimal for hurricane development. "Sea surface temperatures in the Lesser Antilles and off the western coast of the African continent are the warmest in recorded history", according to Godhwani. "Those conditions, combined with an absence of high altitude wind shear in the Atlantic Ocean indicate that the 2010 season will be particularly active".
David Crowe, Senior Vice President , Claims, Lexington knows full well the potential impact of an active storm season, having led response teams for Lexington in the wake of Hurricanes Katrina, Ike, Gustav, and others. "When predictions reach levels such as these, policyholders need to consider an insurer's ability to respond effectively from an infrastructure and resource standpoint".
Lexington has a long established track record of proactive responses to major catastrophic events, having paid over $5 billion in claims associated with the 'big nine' storms of 2004, 2005, and 2008. State of the art modeling and storm tracking technologies help Crowe and his team better project the path and impact of major windstorms and deploy response resources prior to landfall. Its claims staff includes over 200 claims professionals across the United States. These claims professionals average 18 years of experience. Over one third of Lexington's casualty and professional liability professionals have law degrees. The team handles over 20,000 claims each month.
"Our people and systems have been battle tested in terms of resilience and response time", states Crowe. "Our investment in claims infrastructure and technology serves as a key competitive advantage that reduces risk for our insureds by employing the right resources in advance of a major loss".
An effective response in the wake of a major event is mission critical for Lexington. "We have been preparing, innovating, and consistently improving our response capabilities for decades," Crowe concludes. "If a catastrophic event occurs, insureds must be confident that a carrier will be well-prepared to respond to claims and support them when the event occurs."
According to Crowe and Godhwani, Lexington has an established and time tested panel of the nation's leading independent adjusters, engineers, and building consultants. The company has pre-contracted with over 1,000 supplemental vendor staff members who are available should the need arise.
Both Crowe and Godhwani point to the need for insureds to fully understand their carrier's ability to respond in the wake of a major catastrophic event. Asking the right questions in advance can help to avoid costly mistakes in the wake of a major catastrophic event:
Policyholders must consider whether their carrier has the experience and infrastructure to stand and deliver in the wake of a catastrophe loss.
Knowledge of the claims team and understanding its breadth of experience in hands-on complex claims handling is a critical step in assessing a carrier's ability to respond effectively in the wake of a major event. Newer entrants to the marketplace may not have the appropriate claims infrastructure to meet the surge demand that an active 2010 storm season could generate.
Advocacy and access matter. Insureds and their brokers should have a relationship with the insurer's senior claims management.
An insurance policy is more than a piece of paper and a promise to pay. For companies entrusting a significant portion of their asset base and business continuity to an insurance partner, knowing and having access to decision makers is Risk Management 101. If communications are channeled through outside counsel or third party consultants, then clarity and response time may suffer.
Catastrophic events result in a rush of claims activity. Earthquakes, flooding, hurricanes, winter storms, wildfires, and a myriad of other events can result in the need for supplemental professional staff. It is vital that an insurance company has a plan in place to respond.
An insurance company needs to not only have the experienced personnel to respond in a timely fashion but also the infrastructure and resources to support the rush of activity at its peak. Multiple avenues for reporting claims following a catastrophic event are paramount to servicing policyholders at their most critical time of need.
For more information, visit: http://www.lexingtoninsurance.com/catclaims
(The above piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional Insights can be found on our Web site at www.riskandinsurance.com/.)
July 23, 2010
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