Allstate Insurance Co., the second-largest property insurer in the area hit by Hurricane Katrina, is linking platoons of claims adjusters to its Chicago headquarters systems through mobile vans to speed claims adjustment.
The vans have satellite communications hookups to relay claims information gathered by the adjusters in the field to headquarters' systems without waiting for regular telephone service to be restored.
"We are not dependent on a cell-phone tower. We can automatically connect from the van to a satellite," said Catherine Brune, senior VP and CIO at Allstate, in an interview Tuesday, the morning after the hurricane struck.
Allstate is deploying more than 20 mobile communications vans, which will be available as links between headquarters' systems and the 1,500 adjusters moving into the affected areas, Brune said. Allstate is putting more adjusters into the area than normal because of the level of damage inflicted by the storm.
"The technology makes the adjuster's job less frustrating. The link (to headquarters) gives adjusters confidence they have all the information they need" for a quick settlement, she said.
Adjusters from around the country will be pulled in to address customers' needs. But once adjusters are on the scene, they need to know the details of a policy before they can tell customers whether they're eligible for a housing allowance or let them know what the level of insurance was on the contents of their home. Adjusters also need authorization from the head office to produce checks for emergency housing or settlements, she explained. Chopping days off the time it takes to produce these results has a big impact on relations between an insurance company and its customers. Since Allstate speeded up its claims-adjustment process, the company is retaining customers at the highest rate in the 29 years that Brune has been with the company, she said.
Donald Light, an analyst at Celent LLC, a financial-services and insurance analyst group, says using vans to establish a mobile satellite link "is the next logical step" for a large insurance firm's catastrophe team as it tries to speed up customer service. All the major insurers put such teams on the scene of a disaster, but the mobile van link between adjusters and headquarters is relatively new addition in the last two years, he says.
Using a wireless link to the home office "could speed up a claims settlement by 50% to 80%," Light says.
Allstate realized it needed the mobile vans to speed up responses to customers as it dealt with the hurricanes striking Florida and other parts of the South over the last few years, Brune says. The mobile communications vans were in use in Florida as it was hit by a succession of hurricanes last year.
Claims adjusters have all the information they need on a laptop to estimate the amount of damage at the scene. But interaction with headquarters' back-office systems is critical to getting claims checks into the hands of customers. In many cases, an adjuster's laptop has a wireless modem with which it links to a van, which then relays the data to headquarters via the satellite link.
"If you can get the claims adjustment done right in front of the house, it speeds up the process immensely," Light says. Although damage totals won't be known for weeks yet, Katrina is considered to be potentially the most expensive storm in history to the insurance companies. Her total may exceed by $9 billion the $15.5 billion run-up by Hurricane Andrew, according to Air Worldwide Corp., a Boston risk-assessment firm.
Allstate insures about 21% of the homeowners market in Louisiana, 10% in Mississippi, and 11% in Alabama. According to Crain's Chicago Business, a Chicago business publication, State Farm insures 35% in Louisiana, 30% in Mississippi, and 30% in Alabama.