Joplin. Tuscaloosa. Irene. These were some of the places and names the insurance adjusting community came to know during 2011, which became one of the busiest—and costliest—periods of severe weather in history, not only in terms of insured losses but also in terms of lives lost.
Statistics from the National Weather Service show that there were nearly 30,000 reports of severe weather made in 2011 (through Dec. 5), consisting of hail, wind, and tornado events. That represents a 36 percent increase compared to the 22,000 reports in 2010, and a 30 percent rise over the 23,000 reports in 2009. In April 2011 alone, 43 killer tornadoes claimed 361 deaths, a death toll that far surpassed the totals of the previous three years combined and greatly exceeded the three-year average of 64 deaths per year.
According to the Property Claims Service Unit of ISO (a Verisk Analytics subsidiary), there were 29 catastrophes in 2011. Below and on the following pages are the top five events of last year, presented with commentary from Crawford & Company adjusters who recount their experiences assessing damage for each.
#1: Severe Weather in 13 States, Including Alabama Tornado Outbreak
Date: April 22-28, 2011
Estimated Insured Losses: $7.3 billion
Estimated # of Claims: 720,000
Affected States: AL, AR, GA, IL, KY, LA, MO, MS, OH, OK, TN, TX, VA
Source: Property Claims Service Unit of ISO
2011’s top natural disaster in terms of insured losses ($7.3 bn)was the second-deadliest severe thunderstorm outbreak in history. It resulted in the formation of hundreds of tornadoes that ravaged many large portions of Alabama, Mississippi, Georgia, and Virginia, and it was the system responsible for spawning an EF-4 tornado on April 27 that nearly razed the college town of Tuscaloosa, Ala.
“As a claims adjuster, sometimes you get a little numb when you go from one catastrophe to another as a way of life,” says George Rountree, CAT adjuster/supervisor for Crawford & Company, who has seven years of industry experience. “But the tornado damage in downtown Tuscaloosa near the University of Alabama was probably equal to or greater than the worst damage I’ve ever seen in one area. It must have been very scary for the kids there at the college and their parents.
“Of course, tornadoes are highly destructive, but damage is limited to whatever is in its path as opposed to other types of storms, such as a hurricane, where damage is more widespread,” says Rountree. “Given the severity of the storm, the infrastructure in Alabama was much better than I expected. Normally when you go in after a storm, there’s almost no cell service anywhere near the affected areas. But I was impressed by the fact that communication was not a problem. Most roads were cleared, except in the immediate path.”
#2: Severe Weather in 20 States, Including Joplin, Mo. Tornado
Date: May 20-27, 2011
Estimated Insured Losses: $6.5 billion
Estimated # of Claims: 726,000
Affected States: AR, GA, IA, IL, IN, KS, KY, MI, MN, MO, NC, NE, NY, OH, OK, PA, TN, TX, VA, WI
Source: Property Claims Service Unit of ISO
Beginning on May 20, severe thunderstorms in eastern Texas and parts of Arkansas and Oklahoma brought high winds, hail, and five reported tornadoes. According to Dr. Tim Doggett, principal scientist at AIR Worldwide, it was the start of a devastating seven days in which more than 150 tornadoes would be confirmed, including a tornado that nearly wiped out the town of Joplin, Mo. Overall, thousands of buildings were damaged, hundreds more were completely destroyed, and more than 1,000 people were injured.
“The afternoon the tornado came through Joplin, I was hunkered down in my own home,” says Ken Comer, a senior multi-line claims adjuster at Crawford & Company. “I actually started working that night at a trucking company to verify damages there. The next day, I went out to survey damage at churches and they were pretty much blown away. I couldn’t recognize the streets I was on because all of the landmarks were gone.
“I’ve lived in Joplin all my life and it’s the worst event I’ve ever seen,” says Comer. “You see tornado damage on television and the news, but it doesn’t compare to living through it in person. It’s more devastating than you realize. I’ve been an adjuster for 31 years, but that didn’t equip me for what happened in my own town.
“Joplin is slowly getting back to normal,” says Comer. “Everybody is working together and everybody seems to be pretty upbeat. The number of volunteers who have come through here and helped clean up has been unbelievable. Homes are being rebuilt, but not as many as you would think. There were a lot of smaller houses and rental homes in the section of town that the tornado went through, and it may be that those houses weren’t fully insured. There’s going to be a lot of flat ground for a long time.”
#3: Hurricane Irene in 13 States and Washington, DC
Date: Aug. 26-28, 2011
Estimated Insured Losses: $4.3 billion
Estimated # of Claims: 855,000
Affected States: CT, DC, DE, MA, MD, ME, NC, NH, NJ, NY, PA, RI, VA, VT
Source: Property Claims Service Unit of ISO
Although Hurricane Irene’s insured losses made it 2011’s third-costliest disaster, the estimated number of claims far exceeded other domestic natural catastrophes, making this event one of the most active for claims professionals.
The storm made three landfalls between Aug. 27-28: North Carolina’s Outer Banks and parts of Virginia; New Jersey; and Coney Island in Brooklyn, N.Y. Despite weakening at landfall to Category 1 status, Irene caused significant damage in areas like New York and Vermont, which stemmed largely from extensive flooding caused by heavy rains.
“Hurricanes are never a welcome event,” says Matt Anderson, vice president of catastrophe services at Crawford & Company. “However, given today’s monitoring capabilities, they offer one advantage over other catastrophes: the ability to prepare.
“Long before Hurricane Irene struck, our CAT personnel began monitoring the storm and projecting claim volumes through our Atlanta-based command center,” says Anderson, who has 10 years of experience in the industry. “At the same time, we put our adjusters on alert. Once the path of the storm was better defined, we set up an induction center in Charlotte, N.C., to make sure all adjusters handling hurricane-related claims were properly licensed and equipped.
“We also began communicating with clients the week before the storm,” says Anderson. “For the first time, we used Twitter to inform affected parties about developments, and also created a Hurricane Irene Web page that provided updates, maps, and links to key resources. Both were effective communication tools, and we expect to use the Web and social media tools more extensively in the future.
“Throughout the industry, we continue to search for new ways to compress the time between first notice of loss and final payment, which is an important part of policyholder satisfaction,” says Anderson. “This means we require up to twice as many adjusters to handle the same number of claims—but for a shorter duration of time. This became very evident during Hurricane Irene, and CAT adjusters coming out of that event are probably realizing they should expect more frequent, but shorter, assignments.”
#4: Severe Weather in 10 States
Date: April 3-5, 2011
Estimated Insured Losses: $2.0 billion
Estimated # of Claims: 300,000
Affected States: GA, IA, IL, KS, KY, MO, NC, SC, TN, WI
Source: Property Claims Service Unit of ISO
Each year, the National Oceanic and Atmospheric Administration (NOAA) lists the top 10 most active days in terms of wind, hail, and tornadic activity across the U.S. In 2011, that honor fell to April 4, which registered 999 total reports. Most notably, an outbreak of 46 tornadoes in central and southern states caused nine deaths.
“After working as a team manager, I became Crawford & Company’s Kansas service center manager in May,” says Chris Riggs, who has seven years of industry experience. “We were still going strong on claims from multiple CAT events in April, including an April 3 hailstorm that was one of the largest in five years in Kansas City. Then in May, we got involved in claims from the Joplin tornado.
“It was an interesting way to get my feet wet as a manager,” says Riggs. “Clients don’t reduce their service standards for catastrophic events, and it falls on us to properly manage staffing levels. We also have to recognize trends before they happen, so we can have people en route and on the ground and don’t overload adjusters when claims keep rolling in.
“I found that adjusters have a tipping point when it comes to claims volume, but it’s not the same for everyone, and it also depends on the complexity of claims,” says Riggs. “You have to get to know every adjuster and what makes him tick and what his capabilities are.
“Through all of this I’ve found stress management to be incredibly important for everyone,” says Riggs. “We all wanted to prove ourselves, but ended up stretched very thin. I tried to lead by example, but came very close to being burned out myself. Sometimes trial by fire will either forge you or melt you, and I was forged repeatedly this past spring.”
#5: Severe Weather in 9 States
Date: April 8-11, 2011
Estimated Insured Losses: $1.5 billion
Estimated # of Claims: 314,000
Affected States: AL, IA, KS, NC, OK, SC, TN, TX, WI
Source: Property Claims Service Unit of ISO
Given that NOAA statistics cite 875 tornado reports, 2,085 hail reports, and 3,324 high-wind reports in April 2011—making it the second-busiest month of the year for severe weather—it’s no surprise that it also hosted the fifth-costliest natural disaster in 2011, which was due in large part to an outbreak of 59 tornadoes in central and southern states.
“Living in the Midwest, we are certainly cognizant of the fact that wind and hail losses are going to happen, usually at a moment’s notice,” say Kyle Hennessy and Jared Sell, multi-line adjusters and team managers at Crawford & Company. “Once we become aware of the potential for damaging storms, we monitor the news reports to try and determine the ‘when’ and the ‘where.’
“Getting an early jump on where the damage occurs allows us to begin forecasting how many claims we are likely to receive,” they said. “If a storm hits Des Moines, for instance, we obviously know that CAT help will be needed. However, the storms that pass through more rural areas present a less-definable challenge. In these situations, claims counts can be unpredictable, which may make it more difficult to forecast the need for CAT assistance.
“Communication is very important during catastrophes, especially when we’re handling multiple events in a short time period, as was the case this spring and summer,” say Hennessy and Sell, who have five and six years of industry experience, respectively. “You have to make sure your adjusters are comfortable with an increased volume of claims. The additional work wears on everybody, but you have to keep influencing people in a positive way. At some point, it’s going to slow down, it’s going to get back to normal, but you need to keep the wheels on the bus moving in the meantime.”
Eric Gilkey is executive editor of Claims Management magazine. He may be reached at eric.gilkey@theclm.org.