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FROM WITHIN THE CHAOS—IMPROVING THE AGENCY RISK MANAGEMENT PLAN

FROM WITHIN THE CHAOS—IMPROVING THE AGENCY RISK MANAGEMENT PLAN

FROM WITHIN THE CHAOS—IMPROVING THE AGENCY RISK MANAGEMENT PLAN
December 26
10:27 2018

Risk Managers’ Forum

By Cristina Pedraza-Martinez, Esq., J.D., CPA, CIC

FROM WITHIN THE CHAOS—IMPROVING THE AGENCY RISK MANAGEMENT PLAN

Takeaways after Hurricane María

As I begin to write this article, I look around my agency office here in Guaynabo, Puerto Rico, in disbelief. It almost seems impossible that just over a year ago Puerto Rico was enduring one of the most difficult times of its life, and our agency was going through an extremely tough time as well.

Natural disasters will continue to happen. It is what we learn from them … that will make a positive difference in our industry.

On September 19, 2017, we prepared to face the fiercest hurricane Puerto Rico has seen in decades. As a teenager, I experienced Hurricane Hugo and later Hurricane Georges, but what was approaching this time was something else. Only two weeks before, we had withstood Hurricane Irma. Having already worked overtime for several days on Irma claims, our CSRs and claims employees were over-tired and anxious.

Despite this we completed the required steps described in our Catastrophe Management Plan (CMP). Storm shutters were up, computers covered, a backup copy of our customer database with coverage certifications was printed. Backup cellphones were ready. We reviewed our newspaper and radio ads, and prepared Facebook posts—all for use post-hurricane. In short, we walked through our CMP and were ready. We had done this many times during my 16 years with the agency. At noon, we closed operations, hoping for the best.

You probably saw on the news the destruction that Hurricane María left throughout Puerto Rico on September 20. We could not. Not only was the entire electrical grid damaged, but communications were down. There were no cellphones, only one radio station, and a limited supply of gas, and without electricity there was no access to cash or ATMs. Interminable lines for purchasing water and food stretched for blocks.

Despite this, two days after María hit, 25 of our 133 employees reported to work. Looking back, it still amazes me. Five days later, 87% of our employees were back. The commitment to customer service was incredible. Even with the lack of electricity, we restarted operations that same date. We endured much, but we learned so much too! A year later I feel compelled to share the takeaways.

Employees first. Insurance professionals, particularly CSRs, are first responders in a crisis. As such, you must know your employees well. They need to feel secure at work so they can serve others. Do you have their contact information? Do you know who lives in a risk-prone area? After a disaster, do a safety check on each employee, discovering if there is a special need. After María passed, we established a daycare center in our facilities. For almost four weeks, our office was filled with children and other family members who couldn’t stay home alone while their parents or caregivers worked. The children had fun and relieved everyone’s stress, allowing CSRs to concentrate on helping clients. Lunch was served for two weeks, showers were made available, and even ice was provided. We fostered a cheerful work environment despite the difficulties and were thankful for our blessings notwithstanding the catastrophe.

Flexibility and communication are vital. In an insurance agency, customer service is its heart, and after a disaster most clients expect to be served quickly and diligently. Plan for a significant workload increase and ensure that everyone takes this responsibility seriously. Our CMP prescribed training for employees in basic claims processing. However, after this event we learned that we needed all employees, regardless of their position (and a few extra), to process claims and do other traditional CSR tasks for much longer than expected. A year after María, our agency has processed approximately 52,000 claims! Everyone pitched in—sales personnel, accounting, compliance, you name it. Even managers were trained by CSRs in basic processing functions, like how to register notice of loss and respond to simple policy questions. Roles were inverted; leaders were now followers, while some new leaders emerged. Every day was different so timely communication of news, instructions, and process changes was vital.

Stress is real. After a disaster, emotions are raw. Many people lose the only property they have, health is at risk, and individuals are vulnerable. It’s important to acknowledge these feelings and ensure they are managed, particularly when CSRs may be enduring similar situations. Stress takes a high toll on agency pros who deal directly with clients; encourage these employees to share their feelings. Safety concerns rise as stress does. Customers, frustrated with the claims process and living in the wreckage of the storm, may become aggressive. CSRs should know how to deal with these possibly dangerous situations. After the hurricane, we augmented our CMP with training for CSRs on how to manage violent clients, threats, and even active-shooter scenarios. Nothing major happened, but the extra training gave employees confidence.

Pause and review. Review your CMP during the catastrophe. Amid the chaos, pause and review what is working and what is not. Two weeks after the hurricane, when customers were calling in numbers, our team convened our first “Lessons Learned” meeting to discuss and document what preliminarily went right or wrong and to acknowledge emerging issues. The meeting was not for blaming or complaining, but for learning about and fixing our process for the immediate present and the future. We conducted these meetings throughout the year—our final documentation of them is 11 pages long! This exercise delivered a clear and detailed record of issues and alternatives for our annual CMP review and identified new customer experience issues. It also helped us assess and strengthen our internal training program.

Plan for mayhem. As insurance professionals, we must focus on risk management and do some “catastrophic thinking” when preparing our plan. What if your CSRs can’t return to your building? What if they can’t return to your building and do not have cellphone service? What if they can’t return, don’t have cellphone service, and insurance carrier systems also are down? Review your CMP for next year and “stress test” it.

Discuss with your carriers their CMP and yours. Learn how carriers expect to manage operations after a disaster. Meet with them at least annually on the subject and document your agreements. A questionnaire is a good start, but a face-to-face meeting is critical. Incorporate a diverse group of your agency people into this discussion to guarantee that you delve into how the carriers will service your clients. Delineate strategies. Discussing your CMP with carriers is important. This is how issues regarding incompatible operations and processes are discovered, and an opportunity is created to be prepared together.

Natural disasters will continue to hap-pen. What we learn from them and how we use that knowledge to better serve our employees and clients will make a positive difference in our industry.

The author

Cristina Pedraza-Martinez, Esq., J.D., CPA, CIC, is a senior vice president for Popular Insurance, LLC, a general agency and corporate agent affiliatedwith Popular, Inc., in Guaynabo, Puerto Rico. She leads a team in designing and implementing sales and marketing campaigns to bank-related customers in Popular’s corporate agent operation. She has been a faculty member of The National Alliance since 2005.

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