Catastrophe Claims

Bird’s Eye View of Hurricane Damage

The use of drones allowed insurance companies to speed up the claims process and improve safety for their staff.
By: | October 27, 2016 • 4 min read

Hurricane Matthew, which battered the East Coast and the Caribbean in October, was the first major U.S. event where insurers used drones to inspect damage and help process claims.

With estimated losses from the Category 4 storm expected to reach $4 billion to $8 billion, according to industry sources, the need for the quick processing and settlement of claims has never been greater.

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Already more than 90,000 claims totaling almost $550 million have been filed in Florida, according to the state’s Office of Insurance Regulation, while in North Carolina that figure stands at $1.5 billion.

Allstate’s communications manager, Justin Herndon, said the use of drones had the potential to double the amount of properties a claims adjuster could look at in one day.

Just weeks before Hurricane Matthew struck, the Federal Aviation Administration (FAA) introduced new regulations governing the use of commercial drones that made it easier for insurers to use them to inspect and assess property damage after a disaster.

As a result, insurance companies were able to enlist drones for the first time to speed up the claims process and improve safety for their staff after the storm blew back out to sea.

Justin Herndon, communications manager, Allstate

Justin Herndon, communications manager, Allstate

“Drones are absolutely speeding up the process,” Herndon said. “Where an adjuster now might be able to take measurements and photos and look at individual damage in a couple of hours, a simple 15-minute drone flight can capture everything that’s needed and immediately upload it to the cloud for our review.

“Where an adjuster and a ladder might be able to look at three to four homes in a day, an adjuster with a drone could potentially inspect six to eight homes in a day, if not more.”

So far, more than a dozen insurance companies have received approval to operate drones in the U.S., including Travelers.

Jim Wucherpfennig, vice president of claim property at Travelers, said that a team of 20 claims professionals trained to pilot drones were deployed to assess residential and commercial property damage in the five states primarily hit by the hurricane.

So far, he said, more than 125 drone inspections were carried out at affected sites, taking “days” out of the claims process.

“It definitely speeds up the processing of claims,” he said. “With the use of a drone we’re able to do everything in one visit; analyze the damage, get all the measurements down, write the property estimate and give the customer payment for covered losses.

“The anecdotal feedback we get is this is cutting down the time to payment and/or claim rejection.” — John Geisen, senior vice president, aviation practice, Aon

“That enables the repairs process to begin much more quickly.

“It definitely takes days out of the process in terms of eliminating multiple site visits and the scheduling of contractors, and helps the customer get back on their feet more quickly.”

The company launched its training program last Spring in anticipation of the FAA rules and to date it has 60 FAA-certified professionals, with hundreds more being trained in the next several months.

Herndon of Allstate said that the drones assisted in the inspection of around 25 homes, opening the door to more wide-scale use of the technology in the future.

Allstate had previously tested the drones, which can capture 4K-resolution images, enabling adjusters to zoom in with much greater detail, in Texas after a hailstorm.

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“To be able to use drones with our customers who have actual storm damage is a big step forward,” said Allstate’s chief claims officer Glenn Shapiro.

Lockton doubled its use of drones during Hurricane Matthew from previous smaller events, said Sheri Wilson, senior vice president and national property claims director.

“My sense is that Matthew was still more of a test op for many insurers than widespread deployment, but it clearly is trending to greater use,” said John Geisen, senior vice president with Aon’s aviation practice.

“The anecdotal feedback we get is this is cutting down the time to payment and/or claim rejection. If faced with a large count of claims, you might not have the time to scrutinize each as deeply so the ability to quickly assess for damage and focus attention, has value.”

Jim Wucherpfennig, vice president of claim property, Travelers

Jim Wucherpfennig, vice president of claim property, Travelers

Josh Spencer, in catastrophe operations for Zurich North America said that the company used imagery from the National Oceanic and Atmospheric Association as well as data from its call centers and its staff on the ground to assess damage.

The use of drones had also improved the safety of claims professionals by removing the need to climb ladders to inspect roofs and other structures, Wucherpfennig said.

Herndon said: “Safety is a major concern for any adjuster getting on a roof today. There can be steep inclines, slippery/wet surfaces or weak areas from damage where a tree fell, for example.

“A drone evaluation takes all of those concerns away and so we see the future use of drones as a great way to improve safety for our claims professionals.”

Alex Wright is a U.K.-based business journalist, who previously was deputy business editor at The Royal Gazette in Bermuda. You can reach him at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]