Colodny Fass Hosts Webinar on Using Technology to Minimize Claims Disruptions

On May 1, 2020, Colodny Fass held the second in a series of “Pandemic + Hurricane” webinars to provide information relating to the COVID pandemic and its effect on the insurance industry as the industry prepares for the 2020 hurricane season. The webinar focused on the ways insurers can use technology to minimize problems that may arise when adjusting claims during the COVID pandemic. The hour-long webinar was hosted by Wes Strickland, head the Colodny Fass Insurance Regulatory and Corporate Transactions practice, and featured presentations by Florida’s Insurance Commissioner David Altmaier, Mike Williams, Principal Consultant for Aon Inpoint Claims, Quin Netzel, Managing Director at Claim Central, and Chaz Mello, Senior Vice President, at J.S. Held.

Commissioner Altmaier encouraged “insurers to identify new ways of doing business such as deploying virtual claims handling in order to protect consumers and increase efficiencies.” These new ways of providing service to consumers can provide long term benefits in addition to helping insurers deal with the pandemic. He noted that the Department of Financial Services and its insurers industry partners have participated in “insurance villages” after recent hurricanes to allow consumers to meet face-to-face with insurer representatives. Altmaier encouraged the industry to create new ways to conduct insurance villages and provide services to their customers in this new era of social distancing. He also urged companies to look to the Centers for Disease Control and Prevention and the Florida Department of Health for guidance as they update their business continuity plans.

As insurers adopt virtual claims handling processes, Commissioner Altmaier said that the Office of Insurance Regulation (“OIR”) will expect insurers to “clearly communicate their processes to policyholders, agents, and other stakeholders.” He said some consumers reported communication issues between them and their insurers after Hurricane Michael and encouraged insurers to make communication with insureds a priority after the next storm. He said that the OIR will be releasing an updated catastrophe reporting form and will host a technical assistance webinar on May 15, 2020 to answer industry questions about the form.

Mike Williams told the webinar participants that the nation could see a reduction in GDP as high as 40% and unemployment could rise as high as 15%. The pandemic could affect insurers as poor stock market performance reduces investment income and consumers delay or do not pay insurance premiums. The poor economic times could make it difficult for insurers to obtain needed rate changes from regulators. Williams noted that the news was not all bad as the recent “stay at home” orders may lead to fewer losses due to property crimes and early detection of water issues.

Williams said there are opportunities for insurers during the pandemic because there appears to be a drop in new claims. This could lead to a reduction in litigation and could lead to increased settlement rates as insureds seek liquidity. However, insurers will face challenges dealing with the handling of coverage lapses due to payment issues and difficulties with field adjusters being able to inspect property during a time of social distancing.

Williams suggested that insurers develop a strategy to use technology to work-around the problem of consumers not wanting inspectors in their homes. Quin Netzel and Chaz Mello followed Williams by giving demonstrations of new technological solutions to claims adjusting problems. Netzel said insurers must develop better triage methods that can be performed in office without sending adjusters or employees into the field. He provided a demonstration of a phone application that allows the insured to use a camera phone to take video and send it directly to the insurer. The insurer representative will be able to guide the consumer in real time on what needs to be captured on video. Netzel believes technology like this could allow 30-40% of claims to be handled in office by the insurer if they have the right tools. These virtual inspections can cost half of the cost of a field adjustment and may reduce the “surge pricing” problems that insurers dealt with during previous storms when a shortage of adjusters allowed some adjusters charge increased prices to adjust claims. The virtual inspection application also provides more customer engagement since they work with the company on the claim.

Chaz Mello provided a video demonstration of how 360-degree cameras and other technology can be used to create a “walkthrough” of the insured business or residence to help insurers adjust claims without the need for a field adjuster. The video demonstration, and the rest of the webinar, can be found HERE.