The Society of Insurance Research (SIR) held its annual conference virtually in October, and, as expected, the impact of COVID-19 on the industry was at the top of the agenda.
SIR conducted a survey of insurance industry professionals in May to understand the impact of COVID-19 on the business climate. The survey asked how the pandemic was impacting staffing, budgets, work-from-home arrangements, business travel and professional development.
At the time of the survey, 97 percent of carrier respondents said staffing levels have not decreased. When asked about work-from-home arrangements, only 10 percent of respondents said they plan to return to the office full-time once restrictions are lifted.
Travel restrictions will remain in place indefinitely for most respondents. Even when travel restrictions are lifted, nearly everyone will remain cautious of traveling nationally, and nearly three-quarters expect their travel budgets to be reduced.
Micheal Myers, Lead Competitive Intelligence Analyst at USAA and President of SIR, said, “This was an extremely insightful and timely survey of industry professionals. SIR put the insights into action by quickly pivoting from planning an in-person conference to meeting virtually (with record attendance). We also published COVID-related research reference library to help researchers solve business problems. As is consistent with SIR’s mission, we provided these resources to members and non-members alike to advance the industry.”
Over 180 professionals responded to the survey; 67 percent were carriers and 33 percent were suppliers/vendors. A variety of lines and businesses were represented, including commercial, personal, life and health.
By Sean Kevelighan, CEO, Insurance Information Institute
Sean Kevelighan
Insurers have responded quickly and effectively to 2020’s extraordinary volume of hurricanes, wildfires, and civil unrest. These events are resulting cumulatively in billions of dollars in insured claim payouts.
Yet a recent Forbes article stated that the owners of one of the largest Broadway theater chains were “shocked to learn that its insurance companies would not cover most of its losses during the COVID-19 pandemic.”
Making people more prepared and resilient is our fundamental goal at the Insurance Information Institute (Triple-I). We seek every opportunity to educate customers about how their insurance works before they suffer an insured loss. Part of this mission is to explain how pandemics are uninsurable. That’s because, unlike covered events, which are limited in time and geography, pandemics simultaneously affect everybody. This is something we’ve explained in briefings to legislators, legal experts and consumer and trade media.
Still, while insurers, regulators and the U.S. government work to deliver relief to business financially affected by future pandemics, we need to stay focused on the present. And to do this, we need to take a quick look into the past:
Insurance has been around for 350 years as a way for households, businesses and communities to recover and rebound after wildfires, hurricanes and other catastrophes. Time and again insurers have been there for their customers because that’s what they do. For example, in the months after 9/11, insurers paid out tens of billions of dollars to keep affected businesses afloat while New York and Washington, DC rebuilt from the rubble.
In 2020, insurers continue to perform their vital societal role, covering insured losses from record hurricane and wildfire seasons, as well as the most destructive civil demonstrations in more than a quarter-century. Insurance simplifies a rather complex risk management process and creates products that deliver simpler ways for people to be more prepared and resilient. Covering these hazards demands immense capital resources.
Questions? Your Policy Documents Have the Answers
Insurance is heavily regulated, and as the Triple-I reaffirmed at September’s annual summit of the National Association of Insurance Commissioners (NAIC), the industry we represent relies on a strong working partnership with regulators and government agencies across America to help make insurance work better for everybody.
One of the tangible results of this partnership is something that anybody can literally hold in their hands: insurance policy documents. Reading these documents to understand what you’re purchasing is an essential part of preparedness.
Business income (interruption) or BI insurance losses caused by a pandemic are not covered because direct physical damage, such as that caused by a hurricane or a fire, is what triggers a standard BI policy. As many courts and academics around the country have stated, neither a virus nor bacteria leads to the direct physical damage of a business’s structure. This contract language is well-established; moreover, every policy is approved by individual states before they are issued to BI policy holders.
We view it as a success when nobody is shocked by what’s covered, and what’s not, under their insurance policies. This is why the Triple-I regularly urges business owners to become familiar with their insurance documents and have regular conversations with their agent or broker to discuss anything they don’t understand.
In an age when we’re all accustomed to just clicking the “terms and conditions” box, ignoring agreements, paradoxically, has become something everybody can agree with. Social scientists consider this to be a form of cognitive dissonance: We know we should read our insurance policies, and yet few of us do. This is a behavioral pattern we’re all guilty of and the Triple-I understands there are many demands on a customer’s time.
Which brings us back to an essential point, that insurance companies prioritize their efforts and resources into making sure that everybody knows about the coverage they have and need.
Pandemics are uninsurable because insurers don’t collect premiums to cover business losses due to viruses and other pathogens. There are products available for this purpose, but an overwhelming majority of businesses decline to purchase them. These exclusions and the availability of pandemic insurance is a fact well known by many experienced professionals—notably risk managers and trial attorneys. The Triple-I is willing to work with anybody to make the public better aware of the risks and how to prepare for them.
The next pandemic surely will come. How insurers, their customers, and the federal government respond now will ensure our resources and energies are devoted to saving lives from all the threats the U.S. faces.
By Max Dorfman, Research Writer, Insurance Information Institute
Hurricane Zeta became the 11th named storm and 6th hurricane to hit the United States yesterday, as the extremely active 2020 Atlantic hurricane season continues. Zeta struck just one day before the eighth anniversary of Superstorm Sandy.
Sandy was the deadliest and most destructive hurricane of the 2012 Atlantic season, causing $70 billion in economic damages and resulting in over 70 fatalities when it made landfall in New Jersey. It surprised an under-prepared New Jersey and New York City when it arrived. Sandy was no longer a hurricane when it made landfall, having undergone transition into an extra-tropical (e.g., non-tropical) low pressure area earlier that day. Although it was no longer a hurricane upon its arrival, it was still immensely damaging due especially to its large size, as well as its interaction with a strong storm system moving east.
There is some history of late-season hurricanes, but Colorado State University climate scientist and Triple-I non-resident scholar Dr. PhilKlotzbach says it would be an overstatement to call this a trend.
“We haven’t really seen a trend in late-season hurricane activity,” Klotzbach said. “A lot of what drives late-season hurricane activity is the phase of El Niño or La Niña. If you have a La Niña, like we have this year, which is colder water in the eastern and central tropical Pacific, that tends to reduce the vertical wind shear that typically tears apart hurricanes. Reduced wind shear tends to keep the hurricane season going longer.”
Klotzbach noted that 2012 was neither an El Niño nor La Niña year.
What made Sandy different?
Hurricane Sandy was a massive aberration.
“Normally, when storms spin up in the Caribbean and move northeast, they continue moving northeast into the North Atlantic and do not significantly impact land,” Klotzbach said. “Unfortunately, with Sandy it started moving northwest.” Indeed, Sandy managed to wreak havoc across the Northeast and other parts of the country, including dumping as much as 36 inches of snow in West Virginia.
“There was a big high-pressure area over the Atlantic Provinces of Canada that built to the north of Sandy and drove the storm to the northwest,” Klotzbach explained. “The sustained winds were strong, maxing out around 80 mph, but the real problem with Sandy was its tremendous size.”
Given the large size of Sandy, it drove a huge storm surge that spanned from New Jersey to Connecticut including New York City.
“The storm surge from Sandy was incredible,” Klotzbach said. “The surge also coincided with astronomical high tide, which exacerbated the inland penetration of water from the coast. For example, the storm tide at the Battery on the southern tip of Manhattan exceeded 14 feet.”
What we can do
The public needs to be more informed about the dangers of these kinds of storms. Even though Sandy wasn’t technically a hurricane when it made landfall in New Jersey, Klotzbach believes the transition of the storm from hurricane to extra-tropical may have been confusing for people who didn’t understand that the storm wasn’t less of a threat after its classification was altered.
“Just because the storm was changing in structure doesn’t mean it wasn’t a significant threat,” Klotzbach said. “It had just about the same maximum winds as when it was a hurricane. People also looked at the maximum wind and saw that it was 80mph and didn’t think it was that much of a problem. But it was an enormous storm, so the surge was much bigger than what you’d expect from an average category 1 hurricane. From that perspective, there were challenges with conveying the magnitude of the threat.”
Indeed, Klotzbach gives a dire warning about the risks associated with not taking these storms seriously.
“A lot of it is in the messaging when these storms are going from tropical to extra-tropical,” he said. “We need to convey how these threats are changing and that just because a system is becoming extra-tropical doesn’t mean that the threat has gone away. We need to get more social science integrated into meteorology to better convey these results to the general public.”
The U.S.’s property/casualty (P/C) insurers turned in a profitable performance in 2020’s first-half even as the industry’s net income dropped 26 percent compared to 2019’s first-half, according to Dr. Steven Weisbart, Chief Economist, Insurance Information Institute (Triple-I).
“The first half of 2020 was by most measures financially successful for insurers writing P/C insurance. Two measures of the industry’s health—revenue and capital—rose in the first half of 2020,” Dr. Weisbart observed, in a commentary he wrote following the release of a report this week by Verisk and the American Property Casualty Insurance Association (APCIA). P/C insurers write auto, home, and business insurance coverage.
Net income after taxes for P/C insurers was $24.3 billion in the first half of 2020 whereas this same figure stood at $32.8 billion in the first half of 2019. Contributing to that drop was $1.4 billion in realized capital losses on insurer investments in 2020’s first half, a swing from $4.3 billion in realized capital gains a year earlier, Verisk and APCIA found.
The uncertainty within insurance and capital markets due to COVID-19 could be seen in a number of ways, Dr. Weisbart’s commentary noted, as catastrophe-related claim payouts grew in 2020’s first-half, U.S. auto insurers offered to their policyholders pandemic-related premium relief, and the policyholder’s surplus dropped to $772 billion at the end of 2020’s first quarter before rebounding to $826 billion at the end of 2020’s first half. The policyholders’ surplus is the amount of money remaining after the insurance industry’s cumulative liabilities are subtracted from its assets.
By John Miklus, President, American Institute of Marine Underwriters (AIMU)
While it’s not a panacea, a vaccine for COVID-19 is expected to go a long way toward reducing the number of cases and slowing transmission of the virus. Development and testing is moving at a frenetic pace, meaning that in the not too distant future a fully-approved vaccine will need to be shipped in unprecedented volumes.
Experts predict it will take anywhere from 8,000 to 15,000 fully loaded flights to transport 20 billion doses around the world. While air is often the preferred method for shipping pharmaceuticals because of time sensitivity, it’s likely that large ocean transport companies will take on some of the load.
Once a COVID-19 vaccine is approved and manufactured, cargo insurance will be imperative to ensure speedy and safe distribution. Insurance coverage for pharma products, which encompass vaccines, is widely available and written by a number of AIMU’s member companies.
When one considers the infrastructure required to ship billions of doses from manufacturing facilities to hospitals and clinics around the world, this could be one of the biggest logistical challenges in modern history. Pharma shipments such as vaccines present a number of unique underwriting challenges, including:
High valuations: According to one industry analyst, the market for COVID vaccines is estimated at $100 billion, with $40 billion in profits. Shipping companies will handle a lot of valuable inventory and pharmaceutical companies have a lot at stake. A single shipment could be valued into the millions of dollars.
Time and temperature sensitivities: Vaccines currently under development require precise handling. Some need to be stored at temperatures as low as -80C (-112F), which will require special refrigerated containers, along with rigorous temperature monitoring and quality control.
Careful packaging and handling requirements: The vaccine will require special packaging such as cold-resistant vials and boxes to hold multiple vials. Dry ice may be required, along with syringes and protective equipment for healthcare workers administering the vaccine. Besides pharmas, the vendors who supply these products will also have skin in the game.
High theft exposure: Pharma companies plan to use everything from GPS to track their product to fake shipments to confuse criminals. One glassmaker plans to use black-light verification to prevent counterfeiting. Since the start of the pandemic, tests, masks and other gear have gone missing, so it’s not a stretch to think professional thieves and cargo theft gangs will want to get their hands on a precious and valuable vaccine.
The involvement of experienced loss prevention experts is vital to provide advice on proper packaging, proper handling and storage, setting standards and procedures for transportation providers, and recommending security measures to ensure safe delivery. AIMU member companies believe in the old saying that the best loss scenario is preventing one from ever occurring.
Auto insurers used the decline in auto damage claims during the COVID-19 pandemic as an opportunity to refine their claims processes, and customers have noticed.
According to the J.D. Power 2020 U.S. Auto Claims Satisfaction Study, the customer services improvements have led to record-high customer satisfaction. These improvements include ensuring that representatives are always immediately available; completing work when promised; and providing multiple services at first notice of loss.
“It is extremely rewarding to see the insurance industry’s exceptional work being recognized by its most important critic: the American consumer,” said Sean Kevelighan, CEO, Triple-I. “During the pandemic, the nation’s auto insurers have worked non-stop to provide relief and economic security to policyholders who had to file a claim. This is in keeping with their role as society’s financial first responders,” he said in a Triple-I news release.
Key findings of the J.D. Power study include:
Record-high customer satisfaction with auto claims: Overall satisfaction with the auto insurance claims process increases to a record-high 872 (on a 1,000-point scale), up four points from 2019. This is the third consecutive year of improvement in auto claims satisfaction, which has been driven by increases in performance across nearly every factor measured in the study: claim servicing; estimation process; repair process; rental experience; and settlement. The only factor that has not improved year over year is first notice of loss, which remains flat from 2019.
Cycle time improves as claims volume slows: Auto insurers have upped their game during the pandemic, taking advantage of the drop in frequency to increase the speed of processing for claimants. Overall cycle time for claimants with reparable vehicles has improved to just 10.3 days during the pandemic, down from the pre-virus average of 12.6 days.
Quantifying the COVID-19 boost: This year’s study was fielded in four waves from November 2019 through September 2020, giving J.D. Power the ability to compare pre-virus levels of customer satisfaction with those experienced during the pandemic. Notably, the number of claimants who say they “definitely will” renew with their existing insurer is 76% during the pandemic versus 72% pre-virus.
Use of direct repair program (DRP) shops improves satisfaction: The industry’s growing use of directly affiliated repair shops is paying off with a significantly higher overall satisfaction score (888) than for independent repair shops (844). This is driven by quicker cycle times among DRP shops and regular updates on progress.
“The sharp decline in claims volume during the pandemic has served as a test case for the industry in how to make improvements in service delivery that translates directly to increased satisfaction and increased intent to renew,” said Tom Super, head of property and casualty insurance intelligence at J.D. Power. “This is important because it demonstrates that efforts to improve claimant service delivery translates directly to improved business outcomes. The challenge now, of course, will be maintaining that high level of service as claims volumes start to normalize.”
Given the reduced mileage on U.S. roadways this year, U.S. auto insurers are also returning over $14 billion to their customers nationwide in response to reduced driving during the pandemic, according to a Triple-I estimate.
By Loretta Worters, Vice President, Media Relations, Triple-I
Advanced Persistent Threat groups and cybercriminals are likely to continue to exploit the COVID-19 pandemic over the coming weeks and months. Weak and stolen passwords, back doors, applications vulnerabilities, malware and insider threats have been among the most common causes of data breaches in the past. But according to a recent Willis Towers Watson reportnew threats include:
Phishing, using the subject of coronavirus or COVID-19 as a lure;
Malware distribution, using coronavirus or COVID-19-themed lures;
Registration of new domain names containing wording related to coronavirus or COVID-19; and
Attacks against newly and often rapidly deployed remote access and teleworking infrastructure.
Security breaches have increased by 67% since 2014, yet businesses fail to take the proper precautions. Ransomware has become big business for “professional” criminals, crippling large and small businesses alike. But small businesses are especially attractive targets because they have information that cybercriminals want, and they typically lack the security infrastructure of larger businesses.
A remote workforce due to COVID-19 has made many organizations address issues of remote access and the need for multifactor authentication and virtual private networks (VPNs). But others – less cyber savvy— have left themselves exposed to cyberattacks.
In addition, vishing (via telephone) and smishing (via text message or WhatsApp) attacks have also increased in frequency, and in a work from home environment where colleagues and clients are increasingly connecting via mobile phones, vulnerability increases, according to a new AON Report. Short message attacks will generally seek to redirect a victim to a compromised website in order to harvest user credentials.
According to a recent survey by the Small Business Administration , 88% of small business owners felt their business was vulnerable to a cyber-attack – and that was before the pandemic. Yet many businesses can’t afford professional IT solutions, have limited time to devote to cybersecurity, or don’t know where to begin.
In observance of National Cybersecurity Awareness Month, Triple-I offers U.S. businesses these seven tips for improving their cybersecurity and averting data breaches:
Understand yourcyber risks. Businesses are vulnerable to cyberattacks through hacking, phishing, malware, and other methods.
Train Staff. Those engaged in cyberattacks find a point of entry into a business’ systems and network. A business’ exposure can be reduced by having and enforcing a computer password policy for its employees.
Keep Software Updated. Businesses should routinely check and upgrade the major software they use.
Create back-up files and store off-site. A business’ files should be backed up either as an external hard drive or on a separate cloud account. Taking these steps are vital to data recovery and the prevention of ransomware. Ransomware is when a cyberattack results in a situation where a business is asked to pay a fee to regain access to its own data.
By James Ballot, Senior Advisor, Strategic Communications, Triple-I
It’s an understatement to say that the COVID-19 pandemic has affected all areas of our personal and professional lives. Amid widespread disruption, however, people are finding ways to overcome the distance of “social distancing” and to make remote work seem less, well, remote.
Insurance business summer internships are a vital path for educating students about the industry, and for businesses to evaluate promising recruits. However, lockdowns and other measures to contain the spread of the coronavirus forced many companies to re-evaluate their internship programs. Several organizations have stepped in to ensure continuity of internship programs, including insurance businesses, industry trade groups, and in particular, Gamma Iota Sigma (GIS), a student society with 94 chapters serving more than 5,000 members across North America.
Through their Virtual Internships program GIS worked with dozens of companies to offer essential training and education opportunities through project-based or defined duration remote work. And what these businesses have discovered is that remote internships offer some built-in advantages over on-site work, including access to people who are ready-made to succeed amid disruption, as well as the ability to engage with recruits from a greater diversity of geographic locations, talents and backgrounds.
Next up is Kristian Ottesen, a senior at Virginia Commonwealth University, where he’s studying underwriting in excess and surplus lines at that institution’s School of Business’s Risk and Insurance Studies Center.
Kristian spent part of the summer of 2020 as part of a three-person team consulting on the impact of COVID-19 for CNA, a major commercial lines carrier.
Triple-I Blog (III): You had an internship lined up before Summer 2020? What happened?
Kristian Ottesen (KO): I was a part-time intern with Allianz Partners in the Spring, which was cancelled after the first day. Other internship opportunities—including one with a regional broker in Richmond were cancelled or put “on hold.”
(III): You’re on track for a career in insurance. When did you decide this was what you wanted, and what are some factors that contributed to this decision?
(KO): I was majoring in Management and Entrepreneurship at VCU’s School of Business. I was urged by some GIS members and alumni to follow my interest into studying RMI (Risk Management/Insurance). I have to say that it’s been the best decision I’ve made in college so far.
(III): How long was your internship with CNA? Tell us a bit about the work you were doing there.
(KO): My internship ran from June through the first week of August. A lot of what I did involved independent research and reading, with the goal of finding data, news and reporting that fed into charting CNA’s strategy for interacting with broker clients during the COVID-19 pandemic. My team [of three interns] submitted research analysis for feedback from our project supervisor.
(III): What skills and knowledge did you pick up along the way—and what insights do you most want to share with others [who are looking into remote internships]?
(KO): Teamwork, of course. Problem-solving and flexibility [learning in the workflow]. My team and I met weekly via Skype; I encountered some unanticipated advantages to remote work, as well as a few serious drawbacks. Perhaps most important was honing my time management and organizational skills: In addition to working with CNA [via the GIS remote internship program], I was doing coursework in financial modeling at VCU and working landscaping to help pay tuition.
(III): Any key takeaways or advice from this experience that you’d like to share?
(KO): There’s no substitute for working directly with and learning from people in the industry rather than from textbooks or in a classroom. If you get the opportunity, take it!
COVID-19 Could Further Impact Intimate Partner Violence Survivors
By Loretta Worters, Vice President – Media Relations, Triple-I
Financial security and access to resources can make all the difference to domestic violence victims when deciding to leave an abusive relationship. And insurance is an important component of financial planning that can help survivors move forward.
Financial abuse is a common tactic used by abusers to gain power and control in a relationship. The forms of financial abuse may be subtle or explicit, but in in general, include tactics to conceal information, limit the victim’s access to assets, or reduce accessibility to the family finances. Financial abuse – along with emotional, physical, and sexual abuse – includes behaviors to intentionally manipulate, intimidate, and threaten the victim in order to entrap that person in the relationship. In some cases, financial abuse is present throughout the relationship and in other cases financial abuse becomes present when the survivor is attempting to leave or has left the relationship.
Repercussions from the pandemic – layoffs, loss of income, living with abusers due to stay-at-home orders, restricted travel and closures of key community resources – are likely to dramatically increase the incidence of domestic violence, which may further hamper a victim from leaving an abusive situation.
Survivors struggling to get back on their feet may also be forced to return to their abuser. That’s why it’s so important survivors understand how insurance works and what a critical role it can play in gaining financial freedom and economic self-sufficiency.
In support of Domestic Violence Awareness Month, the I.I.I. offers financial strategies to protect victims before and after leaving an abusive relationship. They include securing financial records, knowing where the victim stands financially, building a financial safety net, making necessary changes to their insurance policies and maintaining good credit.
The National Coalition Against Domestic Violence (NCADV) reports that 10 million people are physically abused by an intimate partner each year, and 20,000 calls are placed to domestic violence hotlines each day. In addition, 85 percent of women who leave an abusive relationship return because of their economic dependence on their abusers. Furthermore, the degree of women’s economic dependence on an abuser is associated with the severity of the abuse they suffer.
“Home is often times a dangerous place for survivors of domestic violence, and COVID-19 exacerbates the circumstances, due to the abusers’ ability to further control,” said Ruth Glenn, president and CEO of the NCADV. “Tactics abusers use include ruining the credit of their victim as well as financial and digital abuse, such as stimulus funds being co-opted by abusers to an increase in domestic online harassment,” she said.
Experts agree that domestic online harassment can come in many forms, from impersonating a victim by email in order to sabotage her work, to controlling the influx of information about the pandemic to make her more fearful and reliant on the abuser.
The Allstate Foundation’s domestic violence initiative has been committed to ending domestic violence through financial empowerment, providing survivors with the education and resources needed to achieve their potential again and equip young people with the information and confidence they need to help prevent unhealthy relationships before they start. This year the Foundation contributed $500,000 to help the National Network to End Domestic Violence support more than 100 local domestic violence organizations. The Foundation also provided funding for the National Domestic Violence Hotline to enable remote-working technology and has worked with these organizations who are urging Congress to pass a COVID-19 relief package that addresses the housing, economic, physical and mental health needs of survivors of domestic and sexual violence and the advocates on the frontlines that need additional resources to ensure the safety of survivors and their staff.
“One of the most powerful methods of keeping a survivor trapped in an abusive relationship is not being able to support themselves financially,” Glenn explained. “That’s why insurance and financial education are so important,” she said. “Education can save a life.”
A FORTIFIED roof (left) sustained no damage from Hurricane Sally, the neighboring house (right) did not fare as well.
The FORTIFIED construction certification was developed by the Insurance Institute for Business and Home Safety (IBHS) to protect homes against severe weather. In this post Fred Malik, managing director, FORTIFIED, and Chuck Miccolis, managing director, Commercial – IBHS, talk about how the system held up in Alabama against Hurricane Sally.
In 2004, Hurricane Ivan slammed into Alabama causing widespread devastation. Unwilling to let the same damage happen again, thousands of homeowners and commercial property owners have turned to IBHS’s FORTIFIED program to protect their properties and prepare for the next big storm.
Last month, the ‘next big storm’ came. Exactly sixteen years since Hurricane Ivan made landfall, Hurricane Sally crawled its way onto the Alabama coast. The Category 2 storm subjected homes and businesses to more than 8 hours of relentless winds. While the aftermath of Sally’s landfall vividly showed too many buildings are still not built as strong as they could be, those in the area built to the FORTIFIED standard provide hope for a more resilient future.
More than 16,000 FORTIFIED properties were put to the test and they demonstrated homes and businesses can be built better. In the days following Sally’s landfall, IBHS conducted field assessments across coastal Alabama to better understand building performance, including dozens of FORTIFIED properties. To date, indications are that more than 90% of the thousands of FORTIFIED buildings had zero to minor cosmetic damage. As a wind standard, FORTIFIED performed to its design.
The evidence is clear driving through Baldwin County, Alabama – home and business owners who had a FORTIFIED Roof didn’t need a blue tarp, didn’t have significant water intrusion through the roof, and businesses were able to re-open as soon as flooding abated and power was restored. Most observed damage was only cosmetic, and disruption was minimized, meaning those who made the decision to strengthen their properties aren’t dealing with the headache of rebuilding. Because FORTIFIED provides layers of protection, it stopped the cascade of damage before it started.
Some FORTIFIED homeowners were even able to offer refuge for neighbors in need. Having benefited from local incentives to build stronger, some FORTIFIED homeowners in Orange Beach experienced no damage from wind or wind-driven rain, while neighbors were forced to make repairs as well as tear out and throw away much of the contents of their homes.
Another poignant example took place at the Lodge at Gulf State Park, which had been completely destroyed by Hurricane Ivan. Determined to overcome the vulnerabilities Ivan had so devastatingly exposed, the property owners wanted to be a leader in demonstrating to the community how to build back stronger. They turned to the FORTIFIED program.
The hotel was rebuilt in 2019 to the FORTIFIED standards, and IBHS verified the construction process and material selection complied with those standards. Evaluators, trained by IBHS, guided construction and design teams to minimize flaws that otherwise may have gone unnoticed. As a result, when Hurricane Sally’s eyewall passed directly over the Lodge, it not only continued operations, it also housed employees who did not have FORTIFIED homes. Additionally, many media outlets, including The Weather Channels, chose to stay at the lodge to cover the storm and, some unknowingly, benefitted from the protection of FORTIFIED to report on the hurricane, perhaps prompting FEMA Administrator Pete Gaynor to emphasize “mitigation works.”
Continuing the post-storm research, IBHS will develop an analysis of key factors influencing the performance of these FORTIFIED structures. Preventing avoidable damage is one of IBHS’s three imperatives, and Sally demonstrated how FORTIFIED achieves that mission. For more information, go to fortified.org.
