When most people think about preparing for an oncoming hurricane, they picture boarding up windows and replenishing the bottled water and non-perishable food in their home emergency kit. For those of us who work in the Caribbean insurance market, disaster preparedness takes on a much broader meaning. We play a critical role in enabling families and businesses to rebuild following a catastrophe, and our readiness for the storm directly affects the speed with which we can inspect loss sites and adjust claims.
Unlike earthquakes, which often strike without much warning, Atlantic hurricane season is a recurring annual event, and storm activity can be monitored and predicted to a certain extent. Long before news outlets begin reporting on the next big storm brewing at sea, insurance professionals are carefully studying weather experts’ predictive models for the upcoming hurricane season.
In May, the National Oceanic and Atmospheric Administration (U.S. NOAA) forecasted that 2022 is likely to be the seventh consecutive above-average Atlantic hurricane season, with 14-21 named storms — including between three and six category 3, 4 or 5 hurricanes — expected. The anticipated increase in storm activity is attributed to several climatic factors, including warmer sea temperatures and weaker tropical trade winds.
These forecasts help insurance professionals prepare for what may lie ahead during hurricane season. Predictions of high storm activity levels let us know that we need robust disaster recovery plans and backup technology infrastructure in place for our clients, along with well-trained loss adjusters and other catastrophe response specialists embedded throughout the region and ready to deploy at a moment’s notice.
As our colleagues recently wrote on this blog, “The best way to manage unpredictability is to develop and invest in long-term partnerships today.” Preparing for hurricane season is a prime example of this philosophy.
Insurers who wait until the day after a storm hits to look for loss adjusting and other disaster recovery support will be hard-pressed to find high-quality and available resources, as nearly all service providers will already be committed to their established partners. Conversely, those who have invested in building trusted relationships with the right partners will ensure that their policyholders receive priority care when disaster strikes.
Open exchange of information
Our 25 years of experience serving the Caribbean insurance and reinsurance space have shown that the more data clients share with us in advance of a catastrophe, the more effective a response we can provide. For instance, knowing how many policies they have in various territories helps us prepare for serving those customers’ unique needs with the appropriate resources. Will we need specialists in adjusting homeowners or commercial property claims? Are policyholders concentrated in large cities or distributed across smaller towns? Do we need to be prepared for losses at special facilities, like power plants, that require particular adjusting expertise? The profile of the team we send to respond to a catastrophe depends heavily on these details, and the answers to these questions informs our ability to match the needs on the ground to the right colleagues for the job.
We have encountered some clients who are reticent to disclose such sensitive information prior to a crisis situation. Although we understand the hesitance, we cannot emphasize enough what a difference it makes to have this kind of client data (kept in high confidence, of course) before a CAT event. Caribbean hurricanes often cause widespread power outages, knocking out communication networks and technology systems. We know from experience that we can‘t rely on “business as usual” practices, workflows and data exchange once a storm hits. Clients who trust us with the relevant information in advance will reap the benefits of strategic CAT planning and a more coordinated and prompt disaster response from our team.
When it comes to laying the groundwork in our valued partnerships and ensuring we can meet clients’ needs in the Caribbean following a natural disaster, there really is no substitute for the early and open exchange of information. Let us know how we can help you prepare for the 2022 Caribbean hurricane season!