Millions of people in the US and neighbouring region, utterly devastated by the cyclone series of 2017, must be wondering, “What did we do wrong to deserve this?”
The insurance industry is on top of that list, you bet.
According to leading insurance industry managers, the economic losses coupled with data wipe-out left behind by hurricanes Harvey and Irma have come as another nightmarish experience for the claims processing departments.
Looking at the total devastation across the landscape, with some areas still under water, the focus has shifted to the insurance industry on how well they will cope with the situation and respond to the flood of insurance claims that are piling up at their desks.
In the words of Drew Edwards, CEO, IngoMoney, ‘the insurance industry as it exists today is not geared for speed when it comes to making claims payments to insured clients. The default payment method of choice is the antiquated paper check, which takes a long time to process and mail, and then a few days to clear once it makes into the bank account of the insured. That’s assuming there’s still a mailbox where that check can be delivered and an open bank branch where it can be deposited.’
Pretty sad situation, indeed.
But then, some of it could well have been avoided, say the data pundits and fintech managers who had anticipated such events and advised the industry big-wigs to be better prepared even much earlier.
“What is so interesting is we have been talking to insurance companies now for several years,” added Cecilia Frew, Senior Vice President & Head of U.S. Push Payments for Visa.“Sometimes it takes a crisis to get people to move. We’ve been working with companies in this space — particularly Allstate, which actually launched in-the-field push disbursements to cards during this event. That has been so successful, and now we’re talking to a number of major players about getting something similar up and running.”
In one way, the catastrophe has brought out the best from the men in the business.
Today in data sees more insurance IT managers talking to FinTech companies and similar service providers, to work out mechanisms that among other ways will innovate the system, including push payments for more rapid distribution of funds.
However, the work isn’t as easy as it is being talked about. The data loss in the aftermath, combined with the colossal claim processing procedures and funds distribution mechanism still pose as, someone put it, ‘up against another paper and digital hurricane to be braced.’
The figures – an overview :
$290 billion | AccuWeather estimation of total economic losses attributed to destruction from Hurricanes Harvey and Irma
$250 billion | Approximate damage associated with Hurricane Harvey
$75 billion | Estimated flood-related losses resulting from the recent hurricanes
$15 billion | Total flood insurance losses generated by Hurricane Katrina
$15 billion | Amount included in the disaster relief bill signed by President Trump
65 percent | Number of homes in the Florida Keys that suffered major damage from Hurricane Irma
$6.50 | Average amount it could cost an insurance company to send an insurance check