Another wildfire season has begun. Almost 4.5 million U.S. homes are at high or extreme risk of wildfire, with more than 2 million in California alone.
Residents of wildfire prone areas and just about anyone who is seriously concerned about the dangers posed by wildfire could benefit from the National Fire Protection Association‘s webinars on how to prepare to defend against the destructive threat of wildfire.
A recording of the May 6 webinar on financial preparedness can be viewed here.
The presenters were Nicole Mahrt-Ganley, American Property
Casualty Insurance Association, and Janet Ruiz, Insurance Information Institute
(Triple-I). They offered guidance on how to read a homeowner’s insurance
policy, understand policy deductibles, and the factors to consider when
determining how much insurance coverage to purchase.
Ruiz and Mahrt-Ganley discussed how insurers assess a home’s
risk to wildfires through sophisticated technology and on-site inspections as
well as the ways an insurer calculates homeowner’s insurance premiums based on
the home’s loss history, location, age, size, and its construction type and
quality.
They also provided tips on how to develop an inventory of a
household’s personal possessions, steps to take if a homeowner’s insurance
policy is non-renewed, and how to navigate the insurance claims process.
Triple-I’s “Insurance Careers Corner” series was created to highlight trailblazers in insurance and to spread awareness of the career opportunities within the industry. This month Kris Maccini, director, social media, Triple-I, interviewed Demetrius Gray, Founder & CEO of WeatherCheck.
WeatherCheck, an insurtech that analyzes
weather data to help insurers predict severe weather impact to properties, was
a finalist in 2019’s Resiliency Innovation Challenge.
Demetrius shared insights for building and growing his innovative business, and how he’s advising on severe weather prep amid the pandemic.
Demetrius Gray
Name: Demetrius Gray
Current
Role: Founder
& CEO
Years
at WeatherCheck:
3.5
Tell
us about WeatherCheck? What led you to found this company and build your career
in insurance?
I
was a storm contractor. I chased hailstorms across the continental United
States. Most of my work was around understanding insurance losses, and it gave
me an intimate knowledge, which I used to create WeatherCheck. While there are
numerous weather-related sources, there wasn’t a great place to assess whether
something was damaged or not. For example, would an event at a particular
property rise to the level that the insured should file a claim?
The
insurance industry today is already thinking about creating efficiencies in the
claims process. We allow property owners to sign up on WeatherCheck, type in
any address in the country, and it exposes severe weather loss associated with
that property. We work from the premise that informed people make informed decisions.
At our core, WeatherCheck works to give people quality information so that they
can make the right decision at the right time.
We’re
in the middle of a significant global catastrophe. How has this impacted your
business and conversations around severe weather?
When
the shutdown started happening [throughout the stay at home orders], we had
conversations with emergency managers around the country on what does emergency
management look like for people at home. Normally, they would be at their office
and those structures are built and fortified better than the average
single-family home in the country. What we have seen is an increase in overall
hazard-related deaths this year. The 2020 tornado season has killed more people
than it has in the past few years because people are sheltering in place at
home and risk is greater. We are preparing for these insights now, and we
expect to see even greater risks heading into summer heat waves.
There
is also an infinite question about the current infrastructure. Normally, people
are placed into shelters post event, but that infrastructure has been displaced
largely because the volunteers have been displaced. The inverse of that
conversation is that the risk has been shifted to commercial enterprises and
hotels. If the hotels are closed, then it’s where do we shelter people who have
been displaced? We’re encouraging community partners to have conversations with
stakeholders around planning, including reopening hotels for evacuations
quickly.
Over
the next year, what is top of mind as you grow your business?
Partnerships
are important. We have been working with partners across all sectors to
continue to grow the product itself. How do we help individuals who don’t
necessarily understand their risks or the policies that they’ve purchased to
get what they need? The way we’ll do that well over the next 12-24 months is by
partnering with stakeholders who also have interest in that same asset. Whether
that’s mortgage companies, cities, or banks–that’s where we’ll be focused while
continuing to represent the interests of the insurers.
What
setbacks have you faced in building your business and how did you move past
them?
We’re
the only black-owned meteorology company in the entire country. You get a whole
lot more ‘no’s’ than ‘yes’s’ and those answers are based on unconscious biases.
We had to be very honest with ourselves about what are bias
characteristics–whether it’s race, gender, location–and we had to decide in the
business plan how we were going to overcome those biases. For us, it meant that
maybe venture capital (VC) wasn’t going to be a strong path for us because the
data doesn’t prove out that they would invest in a woman or minority-run
company. We built a profitable business with strategy based on data and that
also influenced what the product looked like.
Through
this process, we decided to go direct to policyholders. The data showed us that
policyholders are largely unbiased and that they want what they want when they
want it. If you have what they want, they will forgo internal biases to make
their buying decisions. By focusing on the data and taking out the emotion, it
allowed us to see viable prospects up front.
What
are your goals for the future in terms of where you want to take your career
and your business?
In
the future, I could see WeatherCheck offering other products and services to
get the insured at a place of homeostasis that is far better than what it is
today. If we look at the number of individuals who are underinsured for flood
or underinsured for fire–the system really sits at the nexus of being able to
drive some of that. We’ll probably see some unique boutique offerings come out
of selling new insurance products geared at solving those challenges. We’ll be
driving better data to continue to inform decisions. We’d like to empower
agents and brokers throughout the country to do an even better job of keeping
the insured better informed. Agents and brokers will play an impactful role in
continuing to drive value. It is very personal when people have a loss from an
event and that personal pipeline is a far better approach than a chatbot or AI.
On May 14 the Insurance Information Institute (Triple-I), co-hosted a
webinar with ResilientH20 Partners that focused on managing
extreme weather events in the midst of the COVID-19 pandemic. The panelists discussed
the changing role of stakeholders across the private sector, governments and
non-profit/NGOs.
The panelists drew from their backgrounds across government, business and insurance to discuss the immediate challenges stemming from the COVID-19 pandemic, the downturn in the economy, and near-term flood and storm threats.
Dr. Michel Léonard,
Vice President & Senior Economist, Triple-I
Richard Seline,
Managing Director, ResilientH20 Partners
Panelists:
Dr. Daniel Kaniewski,
Managing Director, Public Sector Innovation, Marsh & McLennan
Jeff Moseley, CEO,
Texas Association of Business
Katie Sabo, State and
Local Leader, Managing Director, Public Sector Partnership, Aon
Moderator:
Chris Tomlinson,
Business Columnist, Houston Chronicle
Some of the key
takeaways include:
Having
a business continuity plan is a must-have for any business
Flooding
can occur anywhere (not just high-risk zones) – so getting flood
insurance is crucial
In
the midst of the pandemic, we can’t lose sight of the importance of investing
in mitigation and resilience, which will help on a material level post-event
The
COVID-19 crisis is putting unprecedented pressure on local governments – if private
investors have ideas for disaster mitigation, especially ones where return on
investment can be shown – now is the time to bring them, and they will be heard
Insurers
are and will be playing bigger roles in partnering with local governments to
build public/private solutions to disaster resilience
This
webinar is the first in a new series of thought leadership sessions that aims
to be a catalyst for public-private-partnerships focused on enhancing
pre-disaster risk mitigation at each step of the resilience value-chain, from
financing to development, management, technology selection and
crisis-management.
The Atlantic
hurricane season starts on Monday, June 1, but could get an early start this weekend with Tropical Storm Arthur.
Severe convective storms—tornadoes, hail, drenching thunderstorms with lightning, and damaging straight-line winds—are among the biggest threats to life and property in the United States. They were the costliest natural catastrophes for insurers in 2019, and this year’s tornado season is already shaping up to be the worst in nearly a decade.
A new
Triple-I paper describes how population
growth, economic development, and possible changes in the geography, frequency,
and intensity of these storms contribute to significant insurance payouts. It
also examines how insurers, risk managers, individuals, and communities are
responding to mitigate the risks and improve resilience through:
Improved
forecasting,
Better
building standards,
Early
damage detection and remediation, and
Increased
risk sharing through wind and hail deductibles and parametric insurance
offerings.
The 2020 tornado season coincided with most of the U.S. economy shutting down over the coronavirus pandemic. This could affect emergency response and resilience now and going into the 2020 hurricane season, which already is being forecast as “above normal” in terms of the number of anticipated named storms.
“As much as we are living today with the unimaginable impact of COVID-19, we must remind residents along the Atlantic and Gulf coasts to remember it takes only one hurricane or tropical storm to ravage communities and to shatter lives,” said Sean Kevelighan, CEO, Triple-I. “During National Hurricane Preparedness Week (May 3-9), we encourage residents to take a moment to ensure you have adequate financial protection for your property and possessions while also taking steps to make your home or business is more resilient to wind and water. Since we are all needing to stay home more, it’s even more important to make ourselves more resilient to natural catastrophes like hurricanes.”
The Atlantic hurricane season begins on June 1 and continues through Nov. 30.
Review Your Insurance Coverage Make sure you have the right type – and amount – of property insurance. The Triple-I recommends you conduct an annual insurance review of your policy(ies) with your insurance professional.
Standard homeowners insurance covers the structure of your house for disasters such as hurricanes and windstorms, along with a host of other disasters. It is important to understand the elements that might affect your insurance payout after a hurricane and adjust your policies accordingly.
At the very least, review the declarations page of your policy. This one-page information sheet offers details on how much coverage you have, your deductibles and insights into how a claim will be paid.
“You should ask your insurance professional if you have the right amount of insurance coverage to rebuild or repair your home, to replace its contents, and to cover temporary living expenses if your property is uninhabitable,” Kevelighan said. “You should also ask about flood insurance, which is separate and additional to traditional homeowners and small business insurance. Ninety percent of natural disasters involve flooding.”
Flood insurance, which is a separate policy from your property coverage, is offered through FEMA’s National Flood Insurance Program (NFIP) and several private insurers.
Another common exclusion from a standard homeowners policy is sewer backup (also not covered by flood insurance). Backed up sewers can cause thousands of dollars of damage to floors, electrical systems, walls, furniture and other belongings. Sewer backup insurance is especially beneficial in hurricane-prone areas.
Protect Your Vehicles
Comprehensive auto, which is an optional coverage, protects your vehicle against theft and damage caused by an incident other than a collision, including fire, flood, vandalism, hail, falling rocks or trees, and other hazards.
Make Sure Your Possessions are Adequately Protected Imagine the cost of repurchasing all your furniture, clothing and other personal possessions after a hurricane. Whether you have homeowners insurance or renters insurance, your policy provides protection against loss or damage due to a hurricane. Creating an inventory of your belongings and their value will make it easy to see if you are sufficiently insured for either replacement cost or cash value of the items. When you create a photo or video catalog of your home’s possessions, it will also help expedite the insurance claims process if you sustain damage from a storm.
Make Your Property More Resilient Invest in items that will harden your property against wind damage, such as a wind-rated garage door and storm shutters. Triple-I also recommends you have your roof inspected annually by a licensed and bonded contractor to make sure it will hold up to high winds and torrential rains.
Preparing a hurricane emergency kit with a minimum two-week supply of essential items such as non-perishable food, drinking water and medications for every family member.
Creating an evacuation plan well before the first storm warnings are issued.
Tornadoes in
2020 claimed 73 lives as of April 24, according to this article citing NOAA’s Storm Prediction Center.
The tornadoes have all occurred in eight southern states, with Tennessee and
Mississippi having the most. This is the deadliest year for tornadoes in the
U.S. since 2011.
Forecasters had
predicted that above-average temperatures in the
Gulf of Mexico would lead to severe storms across the Deep South and Southeast,
with the risk expanding into the Southern Plains and increasing dramatically
before swallowing traditional “Tornado Alley” across the central United States
by May.
According to Aon Benfield, the United States has recorded five
billion-dollar economic loss events resulting from severe convective storms (which
include tornadoes) so far in 2020. Insured losses from a March 27-30 outbreak are
estimated at $1 billion.
While COVID-19
is causing changes in some business practices, the nation’s insurers are open
and helping customers who sustained tornado-related damage. Property damage
caused by tornadoes is covered under standard homeowners, renters, and business
insurance policies, and under the optional comprehensive portion of an auto
insurance policy.
The Triple-I
has these recommendations when property damage occurs for renters, home and
auto owners:
Contact
your insurance professional and start the claims filing process.
Take
photos of any damage. A photographic record is useful when making an insurance
claim.
Make
temporary repairs to prevent further loss from rain, wind or looting; these
costs are reimbursable under most policies, so save the receipts.
Compile
a detailed list of all damaged or destroyed personal property. Do not throw out damaged property until you
meet with an insurance adjuster. If you have a home inventory, it will make the
claims-filing process easier.
Hold
off on signing repair contracts. Do your due diligence, deal with reputable
contractors, and get references. Be sure of payment terms and consult your
insurance adjuster before signing any contracts.
Check
to see if you’re eligible for additional living expenses (ALE). Standard
homeowners and renters insurance policies pay for the extra charges (e.g.,
temporary housing, restaurant meals) you incur over and above your customary
living expenses if your home is uninhabitable because of an insured loss. Save
all related receipts and, if you have vacated your home, make sure your insurer
knows how to contact you.
Small
Business Owners should
follow the same advice as above when it comes to filing a property damage
claim.
If your
business is forced to close temporarily or relocate because of direct physical
damage to its premises, file either a business income (also known as business
interruption) or extra expense claim, if you carry these coverages.
Tornado
forecasting and reporting
An upcoming Triple-I paper – Severe convective storms: Evolving risks call for innovation to reduce costs, drive resilience, scheduled to be published May 7 – discusses how improved reporting and forecasting and an apparent shifts in “Tornado Alley” affect the ability of businesses, communities, and insurers to mitigate tornado risks and prepare for resilience.
To help arrest the spread (“flattening
the curve”) of Corona Virus Disease (COVID-19), businesses and schools
everywhere are supporting social distancing by expanding remote workspace opportunities.
At the Triple-I’s main offices in New York City and Arlington, Va., we
encouraged our team members effective Thursday, March 12, to avoid unnecessary
business travel and select the workspace arrangements that best support social
distancing.
Laura Favinger, Triple-I’s Chief Administrative
Officer explained in a Q&A session with James Ballot, the Triple-I’s Senior
Advisor, Strategic Communications, the organization’s Human Resources policies concerning
COVID-19, as well as some potential consequences of widespread remote work
during the crisis.
Q: How prepared is Triple-I to ramp up
to extended duration remote work?
LF: The Triple-I is very prepared to
conduct its business away from its two main offices for an extended period of
time, if need be.
We talk a lot about resilience because
we’ve experienced first-hand why resilience works. During Superstorm Sandy in
2012, the Triple-I’s main office in New York’s Financial District was forced to
close for nearly two weeks because 110 William Street was inaccessible due to
the flooding in lower Manhattan. The situation left most Triple-I team members without
access to vital equipment and information. Times like this, unfortunately, are
also when people need the Triple-I most. With this in mind, we’ve built out
capabilities to ensure that we’re able to fulfill our mission to be the “trusted source of unique,
data-driven insights on insurance.” We’re here to educate and inform the
media, consumers, regulators, educators and others with as little disruption as
possible. Since Sandy we’ve prepared for a wide range of contingencies by
migrating to a decentralized information backbone (cloud-based file sharing and
storage), accessible to the entire Triple-I team by laptop and tablet computers
and mobile devices.
Since I arrived at the Triple-I just
over two years ago, we’ve made significant strides toward creating even more
robust, user-friendly and, yes, resilient standardized IT platforms. One
collateral benefit of this effort is that we’ve brought on staff full-time
subject matter experts and researchers who are based throughout the U.S., which
has increased our ability to deliver fact-based information and answers to our many
audiences. We had no idea a pandemic was coming, but I guess that’s the essence
of resilience: assessing and mitigating your potential risks.
Q: What factored into the decision to
encourage your team members to choose the workplace situation that best
supports preventing the spread of Corona Virus Disease?
LF: For starters, we were prepared to
do this, which made the decision easier. As mentioned, our team is
geographically and demographically diverse. COVID-19 poses a greater threat to persons
over the age of 60 and those with existing health complications. We’re
encouraging them to decide for themselves what’s best. To simplify things,
we’re making full-time remote work available to everyone at the Triple-I’s NYC
and Arlington, Va. offices for the foreseeable future. We’ve set Friday, March
20 as our first milestone for review.
Q: Any potential “curveballs” that you’re becoming aware of?
LF: Well, the closing of schools is a bit of a disrupter because it
gets crowded at home when parents and their school-aged children spend all day
under the same roof. But supporting remote work in general has allowed us to
balance professional and personal concerns. One thing we all need to monitor,
however, will be the
prospect of millions of people working and studying from remote locations at
the same time—and this includes increased load from streaming media (which
already accounts for more than two-thirds of all Internet traffic). We’ll need to monitor the possibility of
overloaded information networks and other infrastructure-related consequences
and explore ways to mitigate the effect on the Triple-I’s productivity.
But the main goal—the only goal, actually at least for the
foreseeable future—is for us to do our part to stop the spread of COVID-19.
In this video, Sean Kevelighan, CEO of the Insurance Information Institute (Triple-I), talks about the Triple-I’s Resilience Hub that the organization began developing in 2019 in partnership with Aon and the Colorado State University Department of Atmospheric Science.
The Hub’s goal is to use data in a way that helps people visualize and understand the risk of natural catastrophes with which they are living as catastrophes become more severe and more people move into high-risk areas.
“We’re tracking hurricane paths all the way back to 1990 so that when we forecast with those relative years, people can better understand what the impact might be in today’s economy,” said Kevelighan.
The project also tracks public flood insurance take-up rates through the National Flood Insurance Program. The average take-up rate for flood insurance is only 12 percent for the nation.
The Hub is part of the Triple-I’s overall insurance for resilience project, which aims to build a coalition that includes government agencies such as FEMA, private sector stakeholders such as Aon, and academic institutions such as the Wharton Risk Center to maximize impact. The Hub’s goal is to provide in one location easy-to-use content to empower consumers to make data-driven decisions when it comes to managing their exposure to extreme weather events. “What we want to drive in the long run is behavioral change. We want people to think twice about where they are living and how they’re living so that they can be more resilient.”
Extreme Weather panel (L to R): Charles Chamness, National Association of Mutual Insurance Companies; Francis Bouchard, Zurich Insurance Group; Stephen Clarke, ISO; Dr. Daniel Kaniewski, FEMA; Dr. Rick Knabb, The Weather Channel; Kenneth Tolson, Crawford & Company
It was like music to my ears to hear risk and resilience experts at Triple-I’s Joint Industry Forum, in a panel on extreme weather, talk so much about communication.
Moderator Charles Chamness, president and chief executive officer of the National Association of Mutual Insurance Companies (NAMIC), kicked off the session by asking Dr. Rick Knabb – on-air hurricane expert for the Weather Channel (TWC) – about the impact on disaster preparedness of tools like TWC’s “storm surge depth simulator,” which Chamness described as “somewhat terrifying.”
If you haven’t seen it, the simulator uses virtual reality technology to show viewers what different water depths could look like and the kind of damage they could generate (see video below).
“We’ve gotten a lot of feedback,” Knabb replied. “Some people tell us, `Wow, I didn’t know how bad water can be.’ Some people tell us ‘You’re scaring me.’ And on some level, we’re trying to scare people just enough to respond and to prepare.”
Knabb added that he had no data to prove people who watch such simulations take immediate steps to improve their preparedness, “but we’re seeing the conversation change. Social media is one of the best ways I have to see that happening.”
The challenge remains, he said, to overcome “the positive bias” of people saying, “That looks really scary – but I don’t think it will ever happen to me.”
Francis Bouchard, Zurich’s group head of public affairs and sustainability, took the insurance industry to task for talking about risks in language customers don’t necessarily understand.
“We’re all risk elites here,” Bouchard said. “Our vernacular is not what normal people speak. And yet we insist on using our language to describe something that’s totally alien to most of the public.”
FEMA Deputy Administrator for Resilience Dan Kaniewski agreed.
“At FEMA, we no longer speak in these technical terms like `a one in 100-year event’” – a phrase, he said, that “makes a homeowner who’s just purchase their home think they have 99 years before they have to worry.”
Prepare, Mitigate, Insure
“When we at FEMA talk about ‘resilience,’” Kaniewski said, “what do we mean? We mean preparedness. We mean mitigation. We mean insurance.”
Kaniewski cited evidence from FEMA’s annual household surveys indicating that people in disaster-prone states are “more risk aware and better prepared” than elsewhere in the nation.
“But it’s not enough,” he said. “They have to do so much more.”
Beyond physical preparedness, Kaniewski said, “we have to talk to people about being financially prepared. That means having cash on hand. That also means insurance. Insurance is the best resilience tool.”
“Demand flood insurance”
Knabb agreed, calling upon meteorologists around the world to “talk about insurance more.” He also called on insurance agents to discuss flood coverage for their customers who aren’t in flood zones.
“If it can rain where you live,” he said, “it can flood where you live.”
He recounted buying a new home, asking his agent about flood insurance, and being told, “You don’t need it.”
“I told him, ‘Get it for me anyway,’” Knabb said. “And I’ve changed the graphics I use on The Weather Channel – instead of saying, ‘Ask Your Agent If You Need Flood Insurance’ to ‘Demand Flood Insurance.’”
The panel discussion covered a range of topics, including insurers’ need to emphasize risk reduction and resilience and the “data fluency” of insurance regulators. You can watch the session below.
To distill the insights I collected would take far more than one blog post. Speakers, panelists, and attendees spanned the insurance “ecosystem” (a word that came up a lot!) – from CEOs, consultants, and data scientists to academics, actuaries, and even a regulator or two to keep things real. I’m sure the presentations and conversations I participated in will feed several posts in weeks to come.
Herbert Chain, executive director of the Center for Executive Education of the Tobin College of Business, welcomes speakers and attendees.
Just getting started
Keynote speaker James Bramblet, Accenture’s North American insurance practice lead, “set the table” by discussing where the industry has been and where some of the greatest opportunities for success lie. He described an evolution from functional silos (data hiding in different formats and databases) through the emergence of function-specific platforms (more efficient, better organized silos) to today’s environment, characterized by “business intelligence and reporting overload”.
Accenture’s James Bramblet discusses the history and future of data in insurance.
“Investment in big data is just getting started,” Jim said, adding that he expects the next wave of competitive advantage to be “at the intersection of customization and real time” – facilitating service delivery in the manner and with the speed customers have come to expect from other industries.
Jim pointed to several areas in which insurers are making progress and flagged one – workforce effectiveness – that he considers a “largely untapped” area of opportunity. Panelists and audience members seemed to agree that, while insurers are getting better at aggregating and analyzing vast amounts of data, their operations still look much as they have forever: paper based and labor intensive. While technology and process improvement methodologies that could address this exist, several attendees said they found organizational culture to be the biggest obstacle, with one citing Peter Drucker’s observation that “culture eats strategy for breakfast.”
Lake or pond? Raw or cooked?
Paul Bailo, global head of digital strategy and innovation for Infosys Digital, threw some shade on big data and the currently popular idea of “data lakes” stocked with raw, unstructured data. Paul said he prefers “to fish in data ponds, where I have some idea what I can catch.”
Data lakes, he said, lack the context to deliver real business insights. Data ponds, by contrast, “contain critical data points that drive 80-90 percent of decisions.”
Stephen Mildenhall, assistant professor of risk management and insurance and director of insurance data analytics at the School of Risk Management, went as far as to say the term “raw data” is flawed.
“Deciding to collect a piece of data is part of a structuring process,” he said, adding that, to be useful, “all data should be thoroughly cooked.”
Innovation advice
Practical advice was available in abundance for the 80-plus attendees, as was recognition of technical and regulatory challenges to implementation. James Regalbuto, deputy superintendent for insurance with the New York State Department of Financial Services, explained – thoroughly and with good humor – that regulators really aren’t out to stifle innovation. He provided several examples of privacy and bias concerns inherent in some solutions intended to streamline underwriting and other functions.
Perhaps the most broadly applicable advice came from Accenture’s Jim Bramblet, who cautioned against overthinking the features and attributes of the many solutions available to insurers.
“Pick your platform and go,” Jim said. “Create a runway for your business and ‘use case’ your way to greatness.”
