Hurricanes Test Satellite Imagery Service
While the hurricanes were obviously catastrophic for those caught up in them, they have provided an extensive and real-life stress test for the Lloyd’s market. The response to an unprecedented series of major events has demonstrated the market’s ability to handle complex claims and the related volume efficiently. In such circumstances, it is vital that money reaches policyholders as fast as possible and our findings indicate that the market has been working hard to ensure that this has happened. Given that the claims service has regular customer touchpoints and the claims service provided becomes the single most important factor when a policyholder suffers a loss, we should be doing everything possible to ensure that the customer experience and claims service are prioritised within market modernisation initiatives. Putting the customer at the heart of a future claims servicing and operating model is key.
This year’s devastating hurricane season was the first opportunity to test out the market’s new satellite imagery service, demonstrating how technology can be used to support claims service following a major catastrophe.
Hurricane Harvey, which caused extensive damage in the Caribbean and US state of Texas in late August, saw the Lloyd’s market trigger the Satellite Imagery and Intelligence Service. It was the first time the service had been activated, although it was used again just weeks later for hurricanes Irma and Maria.
The LMA Claims Committee (LMACC) and Lloyd’s agreed to support and fund the satellite imagery service provided by McKenzie Intelligence Services (MIS) in March. The service attracted the broad support of the market, with 44 out of a possible 59 managing agents having signed up by the time the hurricanes struck.
The service provides Lloyd’s underwriters and claims professionals with satellite imagery following a major catastrophe, such as a storm, earthquake, flood or fire.
The service uses a purpose-built portal to deliver the imagery alongside other forms of intelligence. For example, during Hurricane Harvey the service provided intelligence from radar to reveal the extent of flooding: as the storm stalled over Texas, cloud cover delayed the availability of more conventional satellite imagery. The portal also gave underwriters access to CCTV footage from Houston, enabling them to see the extent of damage at a street level.
The satellite service really came into its own for hurricanes Irma and Maria, which caused massive disruption to property and infrastructure, particularly in the Caribbean.
Although this was the market’s first use of the service, managing agents were able to quickly assess the damage footprint and severity of the storm damage in urban areas. However, the imagery proved particularly valuable for the more remote Caribbean islands, which suffered some of the worst damage but were also virtually cut off from the outside world.
By using satellite imagery, the market is supported in its response to a major catastrophe, providing the opportunity to manage and assess claims remotely and, in some instances, making informed and early payment decisions. But the service has other benefits too.
Managing agents have had the ability to use the intelligence provided by MIS to prioritise resources appointed to deliver services on the ground, such as loss adjusters. The images also provide a record of damage and a timeline of events – useful information when establishing whether insurance or reinsurance cover has been triggered. In the case of Harvey, Irma and Maria, more than one storm passed over the same locations, and underwriters were able to establish which storm caused particular damage.
The service is also a valuable tool for exposure management. It can provide managing agents with a clearer picture of exposures and the extent and type of damage at a zip code level at a much earlier stage. The experience of Harvey, Irma and Maria showed the value of satellite imagery, giving managing agents a level of intelligence in the immediate aftermath of a catastrophic event they have not had before.
It also highlighted the opportunity to use information and technology to support claims handling. There is no doubt that there are opportunities to build on the satellite imagery service, such as making portal enhancements, particularly with regard to the use of mapping and data over the imagery.
While the satellite imagery service demonstrated how it can support the market in response to catastrophe events, it also highlighted areas for improvement.
The market service panel will now consider feedback from managing agents for potential enhancements.