The spate of natural catastrophes around the world in recent years underscores the need for businesses to plan effectively for managing these risks. Any planning should include knowing in advance how insurance claims will be handled.
When disaster strikes, management often is fully occupied with protecting the business; claims handling may be delegated to internal staff unfamiliar with complex aspects of claims management. In a disaster, achieving a complete insurance recovery often requires using outside claims professionals.
Whether your firm chooses a single resource for its global needs or builds a network of claims providers in areas where it operates, here are a few points it should consider.
Speed counts. Choose providers that can get to any damaged location quickly. When a loss occurs, insurance companies dispatch adjusters to examine damages and prepare loss estimates, which are used to establish loss reserves. From the policyholder’s perspective, these estimates must be as complete and accurate as possible; once reserves are set, insurers are reluctant to change them. This can lead to difficult negotiations, payment delays and expensive litigation. External claims providers can be key business partners to ensure claims are identified and managed quickly and properly.
Single point of contact. Wherever a loss occurs, your external claims resource should be able to coordinate all aspects of the claim. Ideally, one individual at the claims organization will be a point of contact to quarterback your claim and help you monitor the claim’s progress and keep leadership informed.
Experience. Look for firms with a reputation for successfully managing difficult claims in areas of the world where you operate. They should have a thorough understanding of local accounting, finance and insurance regulations, local insurance carriers, and the unique aspects of your industry.
Global standards. Be sure any providers selected can deliver consistency and results on every property claim, wherever it occurs. They should follow globally recognized methodologies for claim handling.
Benchmarking. Establish a process that can be followed by your external claims management resources around the world. Ideally, these providers will be able to track the progress of the claim against industry benchmarks for similar losses around the world.
Continuous improvement. After a claim is resolved, review the claim preparation and recovery process to spot ways for making improvements applicable in the future to similar types of losses. Claims providers able to track each step in the process can help facilitate improvements, including reducing the cost of risk of your claims management.
Review your insurance. Many commercial property policies include limited professional fee coverage to help pay the costs of outside claims service providers. For a small added premium, coverage amounts may be increased substantially, which can be helpful in addressing large losses from natural disasters.
By taking steps in advance to identify claims resources that best meet your firm’s needs, you’ll be equipped to achieve a faster and more complete recovery when and wherever disaster strikes.
Todd Gillman is a regional director in Aon’s Claim Preparation, Advocacy and Valuations group, which provides global expertise in claims advocacy, commercial claims preparation, and pre-loss asset and business interruption valuation.