Following this month’s insurance catastrophe declaration in Victoria, Insurance Business sat down with Gallagher Bassett global executive vice president Jon Winsbury (pictured), and here the Australia-based leader highlights the collaborative relationship between third-party administrators (TPAs) and insurers, as well as the importance of foresight when it comes to disaster response and claims management.
“It works best when it’s pre-planned,” said Winsbury, who has been with Gallagher Bassett since 1998. “Understanding where the TPA fits into the insurer’s response is an important step to have been constructed adequately when there is no event. Trying to do it in the middle of an event is very difficult.
“It’s knowing how best to use the TPA. Sometimes we work best with an insurer by handling their business-as-usual claims while they turn and orientate towards a catastrophe, and sometimes it’s better for the insurer to use us to deal with the catastrophe while they focus on their business-as-usual, or it can be combinations of that depending on what works best for the insurance carrier.”
Post a surge event, such as the recent Victorian floods, the EVP said among the main considerations are supply chain issues that are exacerbated by COVID-19. Front of mind, aside from loss mitigation, is how to access the right amount of materials and the labour force for repairs.
“The supply of materials in Australia is very stretched at the moment,” he noted, “with timber, for example, being in very short supply. So, that’s elongating repair times for customers. It’s bad enough when you have a large catastrophe, to just get the repairs done in a timely way and ensure that the customer service is kept up on the insurer’s behalf.”
Along with forward thinking, preparedness also entails experience and continued learning.
Winsbury told Insurance Business: “Having done the logistical work previously, understanding how you would deal with multiple events, and the planning required for that is very important. So, our best contracts are where we’re constantly working on that through the year so that we can modify it depending on lessons learned.”
“Our priority,” he stated, “is to continue to understand how we can best service clients by managing these things well by forward planning with them, and then it’s training our people to be able to adapt.
“We have to spend a lot of time making sure that our core group of leaders that are experts in this space are constantly learning new skills and keeping up to date with what the insurance company requirements are – from the changing nature of their repair networks, to the types of risks that they’re writing.”
As for what’s ahead in terms of disasters, the Gallagher Bassett executive warns of a double whammy.
“The footprint of humans in Australia is growing,” said Winsbury. “So, all of the coastal communities are growing in size as people seek lifestyle changes, which brings with it a lot more infrastructure. Here’s a simple example: in the 2011 floods in Queensland, there was a whole lot of new property developments that were built on floodplains where previously in 1974 there were no houses there.”
The EVP declared: “If you see an increase of spiking weather events, it’s a double whammy because you’ve also seen an increase in the economic footprint or the infrastructure footprint along those coastal fringes. Not only is the likelihood of more events real, but also more things are damaged.
“Our outlook is that will continue as the population increases. And as the wealth of the country increases, those costs of repair will increase, and there’s no signal that that will change unless the economy goes backwards significantly over multiple periods of years.”
