A severe storm is coming ashore in the insurance claims industry, and we’re not just talking about the upcoming hurricane season.
It has been building for a while, and like a tropical storm growing into a hurricane, the conditions are just right for this storm to wreak havoc on the claims industry.
With a unique set of challenges disrupting the industry this past year, call centers must be knowledgeable and proactive if they want to come out of the upcoming hurricane season relatively unscathed.
Inflation, Supply Chain Issues, Turnover Fuel Storm
Inflation is as high as it’s been in about 40 years, and there’s no real way of knowing how long it will last or if we’re approaching the high or low points of inflation rates.
The rapid rise in inflation is like kryptonite to insurance companies as they often can’t increase premiums across the 50 U.S. states quickly enough to offset surging costs. This means insurance companies are behind the 8-ball, often losing money during these times. In fact, AM Best maintained its negative outlook on US Personal Lines Insurance for 2023.
On top of rising inflation, supply chain backlogs continue plaguing the industry. This is slowing repair cycle times and often inflating the number of incoming status calls, leading to a deterioration of loss ratios.
This is evident in rental days per repair. Enterprise Rent-A-Car recently reported that the average length of rental for collision replacement-related rentals is up by nearly a third compared to cycle times in 2020.
...like a tropical storm growing into a hurricane, the conditions are just right for this storm to wreak havoc on the claims industry.
The Great Resignation and minuscule unemployment rates have pushed employee turnover levels at call centers well above industry norms. For this reason, the cost of turnover is another added expense to an already struggling sector. And with inflation pushing up the cost of living and wages, it is an endless effort for some call centers to maintain a fully staffed team.
In addition to these market changes, we are also seeing Americans return to traveling, leading to increasing accident and insurance claims.
These challenges are likely to persist, which could set up another challenging year for insurance companies in 2023.
Call Centers Under Water Already
Listening to my friends across the industry, I am hearing comments like this:
“Our phones are ringing off-the-hook with new claim reports, and our hold times are increasing.”
“Customers are calling non-stop to get claim status updates due to repair delays.”
“My best employees are working around the clock, racking up tons of expensive overtime hours under a mountain of stress.”
Unfortunately, natural disasters do not slow down amid these hardships, and we are on the cusp of another tornado season – tornadoes have already struck many communities this spring--followed by the hurricane season in the summer. Both are devastating weather events that wreak havoc on multiple communities, causing millions if not billions of dollars in damages.
Navigating Storm Impact
The cumulative impact of this storm and industry disruption will, at some point, trickle down to your customers while they are going through a terrible period in their lives.
Some might be losing their homes for the first time while others may be frustrated to go through this ordeal again if they live in flood-prone or high-risk areas. All of them will be looking to their insurance company for compassion and help to navigate this tumultuous time.
The pressure is on for leaders to keep hold times short and keep employees engaged. These are critical challenges if you want to retain top talent in the industry and provide customers with great service at the insurance moment of truth.
You might like to equip at least some employees to work remotely in the event the call center closes.
All is not hopeless, however. There are solutions available right now that can help get your claim centers—and indeed, for other critical centers like for healthcare, communications, transportation, and utilities-- to higher ground and through this storm.
How to Weather-Proof Your Call Center
Plan ahead. You would for your home, it’s important to make sure your call center has a plan in place to deal with disruptions as they arise during a natural disaster. In addition to the normal preparations, like having generators on-site to provide power in the event of an outage (like for your sump pump to protect your furnace and water heater), do you have extra capacity at the ready?
You might like to equip at least some employees to work remotely in the event the call center closes. Having backup call centers within your organization, or as provided by third parties, can keep your customers just a call away from fast claims service.
Disasters impact communities and homes in different and unexpected ways. When Hurricane/Superstorm Sandy hit New Jersey, much damage occurred inland, away from the ocean, from the flooding of inlets and lakes during the storm surge.
Account for all employees. According to SQM Group, before the COVID-19 pandemic, in 2019, only 20% of call center agents worked from home (WFH); however, after the pandemic, in 2020, that number skyrocketed to 82% and continues to grow.
For this reason, contact centers must also account for all WFH employees in the aforementioned plan. Evaluating the needs of these employees in case of a natural disaster and making sure your plan includes emergency equipment in case of power outage and processes to protect sensitive data in case of a weakened network is essential.
Proactivity is the key, so ensuring employees are equipped with handouts and training ahead of time will help your call center run as smoothly as possible this disaster season.
Beyond prepping employees for natural disasters, contact centers should also make sure their employees and any business equipment are insured.
In some cases, professional business property is covered to some extent under the employee's homeowners insurance; however, you should not rely on that. Instead, look into what your business liability insurance covers when it comes to remote workers.
Involve technology. Before an anticipated weather event, make sure your team is ready to continue providing customer service in this fraught situation.
Different disasters require different approaches. Technology can also help. Consider equipping your call center with the technology to collect damage photos directly from customers during loss report calls, during which artificial intelligence (AI) can provide an initial damage assessment in a couple of minutes.
This solution can help take a load off your staff, freeing up bandwidth to help elsewhere—it is a scarce commodity when events happen and must be prioritized for emergency response and recovery--and increasing productivity.
Some tech solutions can also identify total loss vehicles from a few simple customer photos. With technology and the proper training, you can turn your staff into “Bionic Adjusters” or adjusters leveraging technology to expedite claim settlements quickly and accurately.
Promote self-service with proactive notifications. Like preparing your team, preparing your customers can go a long way, too.
Proactively inform them about what is forecasted and what preparations they can take to mitigate damage. Let them know if and when it is safe to return and what steps they need to take to ensure they can do so without harm. There still may be widespread utilities outages, curfews to prevent looting, road, bridge, and tunnel blockages, and loss of ferries and mass transit links.
The notification can also serve as a reminder to customers that your call center may be dealing with an influx of calls following the disaster. Subsequently, it can double as another reminder on how to quickly access your self-service claim options for digital claim reporting.
Certain solutions can be easily added into your self-service reporting portal ahead of time to allow customers to submit damage photos in real time. This expedites the process of reporting loss by leveraging fast AI damage assessments to allow adjusters to respond quickly to the claim.
Be flexible. In some cases, your traditional brick-and-mortar operation may not be feasible if the location is threatened by severe weather, making it difficult for your customers to travel to claims offices and perhaps drive in claims locations.
Empower adjusters with virtual damage inspection tools to quickly visit customers electronically and gather the information needed to expedite claim settlements. Also, consider pre-arranging partnerships with a third party that handles virtual claims to quickly adapt with turn-key damage estimating solutions that can grow capacity overnight.
More and more, these contingency plans have become a must-have not just during hurricane season, but year-round because disasters can occur at any time. Even when a hurricane isn’t on the horizon, many communities are threatened by severe storms, hail, blizzards, earthquakes, and wildfires.
The threat of natural disasters and non-weather challenges will always be a constant, but with preparation, your call center can be ready to handle claims and take care of your customers. The key is to act now and not wait until the eye of this storm stalls over your call center.