Brett Goldberg
Monumental advances in technology often lead to transformational change. Whether the automobile or the iPhone, we all know that technology is key to initiating breakthrough performance and changing lives. But, new technology doesn’t catalyze change on its own; it’s just an agent for the needed change. The transition itself occurs through a series of events, set into motion by the evolution of solutions prior to the introduction of the transformational technology and driven by the demand for a more meaningful solution. For example, the Palm Pilot or the Blackberry didn’t catalyze change like the iPhone. It was that generation of mobile phone, at that inflection point in the market, that led to the iPhone becoming the industry standard ten years ago. However, the Palm and Blackberry paved the road and readied the consumer market for the need for a technological breakthrough that the iPhone delivered.
Property & Casualty insurance, a slow to change industry, has relied on the same workflows and resources for adjusting insurance claims for the past 30 years. These workflows start and stop with a single point of failure – an individual called an adjuster, also known as “Superman”. He’s capable of being in multiple locations concurrently, inspecting complex damage to building materials, applying diverse and complex insurance carrier guidelines to that damage and then producing an estimate of the loss, using a complex systems-based platform, to complete the task. The inspecting and scoping task largely occurs on a clipboard with graph paper and forms. They capture the “data” to produce the estimate themselves and, in most cases, they are running against the clock to complete their work. After all, the process is time consuming and speed is paramount to doing the job correctly. Sometimes they battle the villain Lex Luthor, which could take the form of a Public Adjuster or a Restoration Contractor and, every once in awhile, everything goes smoothly and the ultimate client being served – the policyholder – gets their money from their insurance company swiftly.
Catastrophic events, such as hurricanes, add a kryptonite effect to the process. The volumes of losses are so high and deployment challenges so vast that no single human individual can do it all in a timely manner. Here, in September of 2017, CATs are also the catalyst for a transformation industry change.
As we know, Hurricane Harvey made landfall in Texas in late September and created over $10B in insured losses, not including damage covered by the National Flood Insurance Program (NFIP). Tragic as the flooding and losses were, that event alone would not have beaten the Superman adjusters. The covered losses were relatively straightforward and many homeowners were unfortunately without flood insurance protection, which made their losses straightforward to scope.
Two weeks later, Irma packed a punch on the Caribbean and state of Florida and generated over $30B in insured losses through 500,000 wind-related claims. Insurance adjusters scurried to complete their work in Texas before making their way to Florida where adjusting rates were skyrocketing. Scarcity brings demand and carriers have been willing to pay a premium for Superman’s capabilities over the past three weeks.
On September 20th, Hurricane Maria hit Puerto Rico with the wind strength of Irma and the flood strength of Harvey. The resulting damage may set the U.S. territory back decades. As of late September, nearly 45 percent of the population (1.5-3/5M people) are without proper drinking water. At last report, there is potentially $85B in insured losses from Maria, with the majority of that affecting properties in Puerto Rico.
Thus far, Superman has not yet arrived on this small U.S. island in the Caribbean. The job specifications for adjusting losses in Puerto Rico may as well include the ability to fly:
- Plan to spend three months to a year onsite
- Be in excellent physical shape because the conditions are “extremely tough”
- Speak Spanish if possible
- Prepare for poor housing conditions and limited network/Wi-Fi access
- Know how to adjust flood claims
The industry could soon find there is no amount of money that can meet this criteria. Superman is busy in Florida now, tired, rusty on his Spanish-speaking skills and concerned about the safety conditions on the island. But, what about lookers or scopers or retired military or millennials eager to help out and earn some cash? They could potentially fill many of those requirements and, with the right technology in hand, transfer field data back to a remote location where someone can adjust the file or write the estimate.
Change can result when the status quo breaks. If it doesn’t happen from Irma, it will surely occur from Maria (or possibly another hurricane forthcoming during this epic storm season.) Now is the time to embrace innovative technology solutions that unlock new workflows and new users to catalyze the change. How will it work? Less experienced inspectors can capture data and follow protocols using mobile technologies. Others, at the desk, can close the files. More experienced field experts can inspect and scope faster. One day soon, all inspectors should benefit from advances in machine learning and object recognition. Perhaps, in the future, no field inspector will be required on some losses at all.
Tom Peters once said, “for the blue collar worker, the driving force behind change was factory automation using programmable machine tools. For the office worker, it’s office automation using computer technology: ERP systems, groupware, intranets, extranets, the Web, and e-commerce.” The evolution of change for the insurance adjuster requires a combination of field empowerment and remote access to a desk location. These solutions now exist and the timing is right.
Sadly, the Superman adjuster may become less important during this shift, but the industry and its customers, the heroic people that pay money for property insurance every day, will benefit from the much needed change.
