Catastrophes such as the weather event in Queensland earlier this year, Hurricane Katrina in New Orleans in 2005 or Ash Wednesday in Victoria in 1983 have significant implications for the insurance industry. Spare a thought for the various parties to an insurance claim.
The Insured
The Insured is the most important party to an insurance claim. As well as financial loss, the insured is also likely to have sustained personal or emotional loss. The Insured requires professional, prompt and considered attention to his/her individual circumstances and claim.
The Insurance Broker
A large volume of claims created by a catastrophic event may also place considerable pressure on the Insurance Broker. The Insurance Broker is often the Insured's first point of contact and the administrative pressures placed on the broker increase considerably. A thorough system is required to ensure the Insurer and other consultants are notified and claims handled efficiently.
The Insurer
Catastrophic events impose a significant administrative and financial commitment on the Insurer. The Insurer needs to manage the influx of claims, appoint loss adjusters, understand the nature of the loss, determine policy response and manage cash flows generated by the event.
The Loss Adjuster
There are several major loss adjusting firms in Australia, each with a specific number of staff, each of which specialise in particular areas of insurance. A catastrophic event, generating a large number of claims significantly increases workloads. This necessarily reduces loss adjusters' response time.
It is simply a question of economics. Understandably the industry cannot afford to retain a large number of Loss Adjusters during periods of "normal" workloads to enable them to respond to a catastrophic event which may only occur once every two to three years. Adjusters can be brought in from interstate or overseas but greater response times should be expected.
Loss Adjusters may also be required to spend extended times in unfamiliar surroundings with limited facilities away from the office and family.
The Claims Preparer
Like the Adjuster, catastrophic events also increase the workload of claim consultants. Claim Preparers may be required to work extended hours, travel to remote locations and carefully prioritise client requirements and respond to their cash flow issues.
CONCLUSION
Claims caused by catastrophes place pressure on all parties to an insurance claim and consideration and respect of each party's role is required.
Author
Claim Solutions Pty Ltd
Insurance Policy
Country: - Australia
Policy Description: - Various
Insurer: - Various
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