Every Day Is Earthquake Day.
Thankfully, 2012 has not proven as volatile in terms of catastrophic (CAT) events as 2011—yet. Still, there have been 22 declared CAT events in the U.S. year-to-date, including three that each caused more than $1 billion worth of damage. More volatile and severe weather due to climate change is the clear new reality.
Combined in part with a shift in population to the coasts, both in the U.S. and worldwide, even a static level of catastrophe would now inflict more damage. With the business world flatter than ever, indirect risks to the supply chain abound. No business can consider itself safe from the effects of catastrophes. Businesses need to focus attention on their CAT preparedness, both in terms of their own planning and that of their insurance carrier. In the case of Zurich, the latter can certainly inform and assist the former.
“Around here, we like to say that every day is earthquake day,” says Mike Cincinelli, National Catastrophe Team Manager, Zurich in North America Property Claims, who has been with Zurich since 2004 and helped create the team he manages.
Upon consideration, the phrase proves on point for several reasons. Zurich’s global reach means the company is indeed likely to be needed to respond to a CAT event.
“We’ve established a global CAT network that came out of lessons learned following Chile,” says Gerald Kissner, Zurich in North America Vice President, Property Claims, referring to the 8.8 earthquake that devastated that country in February 2010. “We wanted one global set of best practices regarding CAT response. As part of that we maintain a roster of available people who can help, and whose expertise we can utilize to help our customers. We’re leveraging our global scope,” says Kissner, a 15 year Zurich veteran who serves on the Property Claim Subcommittee of the American Insurance Association.
In this case, “lessons learned” isn’t just phrasemaking. Zurich has extensive meetings each January to review and understand what should be gleaned from the past CAT season and to identify opportunities for continued improvement. The company has a readiness model built on overall preparedness, collaboration—the “one Zurich” approach—and striving for continual improvement, always looking to update its own methods and best practices as appropriate.
To underscore its success in this regard, Zurich Insurance Group has garnered international recognition from the P&C industry. (Zurich in North America is part of Zurich Insurance Group, a global entity that serves customers in 180 countries and territories.) In March 2012, Zurich Insurance Group won an Innovation Award for its Multinational Insurance Application from Business Insurance Magazine. It was also named Best International Insurer by an alliance of brokers at Trust Risk Control’s 7th Global Member Conference and International Network Forum in Barcelona, largely on the strength of its Multinational Insurance Application product, a tool that provides clarity to brokers and customers around complex regulatory and foreign premium tax requirements.
“Every day is earthquake day” also hints at Zurich’s varied customer base and the associated demands. A used car lot and a global manufacturer are two very different breeds of customers. This in turn requires expertise both wide and deep. CAT specialists, for example, focus on large losses, business interruption, and so on, across many lines of business. Zurich’s CAT specialists know the specifics about an industry and can speak the language of a business—the key components, the key drivers, its needs at the time of crisis. That’s the definition of specialization.
Small stuff or big stuff, simple stuff or complicated stuff, builder’s risk or energy: what unites them is that all benefit from anticipation, readiness, experience and expertise. Zurich’s expanding internal business interruption capacity allows for more focus on effectively and efficiently resolving a wide range of complex issues, thus assisting customers in moving past the loss event.
The company’s size and scope help build vendor relationships. These vendors—mold remediators, for example, or specialists in hospitals, trains or power plants—might assess or mitigate losses, or help shorten the timeframe that the business is down. Their expertise can be essential in helping manage total cost of loss.
“Everything comes down to acting with a sense of urgency on behalf of the customer,” says Cincinelli.
He cites as an example ZCAT: the Zurich Catastrophe Action Team. Launched five years ago, this outreach program has components that are both proactive (e.g., reaching out to brokers and customers within a hurricane’s cone of uncertainty to exchange contact info and understand their basic business continuity plan for the day after) and reactive (making sure their immediate needs are understood should the storm impact them). After the March tornado in Branson, Missouri, Zurich had boots on the ground within 12 hours.
Says Cincinelli: “Whether it’s contact over the phone or boots on the ground and knocking on doors, our catastrophe outreach says that Zurich is here for you when it matters most.”