How to build a CAT response action plan

With natural disasters intensifying each year due to global warming, the insurance industry faces mounting pressure to adapt—or be overwhelmed. With 2023 marking the hottest year on record and global insured losses from natural catastrophes reaching $108 billion, insurers are feeling the strain of increasingly frequent and costly events. 

This was the fourth consecutive year where insured losses exceeded $100 billion. Experts project these losses could double within a decade due to rising property exposures in disaster-prone areas.

For insurers operating in exposed states, the financial strain of recurring natural disasters is a powerful reminder of the need for resourcefulness. Recent events underscore just how essential it is for insurers to be ready when disaster strikes. 

It's not just about having systems in place—it's about being prepared for scalability and blending innovative digital solutions with skilled, empathetic support to handle rising overdemand and keep services steady when policyholders need them the most.

Meeting demand during disasters

After a natural disaster, insurers experience a rapid surge in customer inquiries and claims. Traditional call centers can quickly become overwhelmed, leading to delays, frustration, and significant service backlogs. According to recent data, the number of catastrophic events causing insured losses has been growing by an average of 7.5% per year since 1994. For insurers, implementing scalable solutions to handle these peaks effectively is key to delivering a positive customer experience, even during challenging times.

This approach enables insurers to maintain service quality while managing sudden spikes in demand. In turn, policyholders get the timely, reliable support they need.

Streamlining claims handling

When disaster strikes, quick, efficient claims processing can make all the difference. After a major storm or wildfire, when property damage is widespread, insurers need to act fast to get support rolling for their policyholders. Customer support and technology play a crucial role here, simplifying the First Notice of Loss (FNOL) process for insureds in their time of distress while allowing insurers to capture essential information accurately and assess claims without delay. For carriers, the focus needs to be on getting help where it's needed, as quickly and smoothly as possible, when every minute counts.

Catastrophe calls for partnership. Insurance carriers need to have a trustworthy network with instant actionable capabilities that can scale fast-response operations during this type of events that leave little notice. 

Let's analyze three key ways in which tech-driven solutions can streamline claims handling in the aftermath of a disaster.

Enhancing FNOL efficiency

In high-risk areas for natural disasters, time is always going to be of the essence. Digital FNOL systems make it easy for policyholders to report a claim right from their phone, snapping and submitting photos of damage directly through an app. This saves valuable time and lets insurers spring into action. With automation, insurers can quickly prioritize claims based on severity and get resources to the areas that need them the most.

Automating damage assessment

When disaster leads to a claims overflow, insurers need to keep things moving smoothly. Automated tools with Visual Intelligence like vehicle damage image recognition can speed up the process by assessing damage photos instantly, cutting down on bottlenecks. This ensures that even during high-claim periods, stakeholders can keep up the pace to deliver timely service.

Managing claims with AI

AI technology helps involved teams stay organized under pressure. With the right tools in place, insurers can sort claims by urgency so that critical cases get immediate attention, while overdemand and after-hours calls can be assigned to trusted BPO partners. Having AI and expert oversight work together means insurers and their partners can offer a responsive, reliable experience that builds trust with policyholders during difficult times.

Balancing technology with skilled, empathetic support

Digital tools are a game-changer in disaster response, but the value of a compassionate support team remains unmatched. After large-scale disasters, policyholders need more than quick answers—they need reassurance. Insurers who blend technology with a personal touch make a lasting impact by delivering both efficiency and genuine care. Skilled teams handle the tougher cases to guide policyholders through the often-stressful process and offer support every step of the way.

This tech-human blend lets insurers manage overdemand claims intake with a personal touch that will become a decision-maker towards customer retention. For example, during Hurricane Beryl, insurers using this approach channeled claims through specialized contact centers, bringing expert staff in to assist 24/7 with complex needs. This thoughtful balance empowered insurers to deliver high-quality service and, in turn, deepen trust and loyalty with policyholders.

Partnering with suppliers and shops

When it comes to auto insurance in disaster-prone areas, strong partnerships are essential to helping policyholders get back on the road quickly. Surges in repair demand require seamless cooperation between insurers, shops and suppliers.

With the right network and technology in place, insurers can offer a seamless claims workflow for their policyholders, enabling real-time updates and keeping repairs moving without unnecessary delays. This kind of teamwork not only speeds up the process, but also ensures that policyholders feel supported with timely, transparent service.

Preparing for future events

As natural disasters become more frequent and intense, resourcefulness must be a top priority for the insurance industry. With economic losses from natural catastrophes hitting $280 billion in 2023 alone, insurers know that it takes a combination of cutting-edge technology, skilled support, and strong partnerships to keep up. By building a foundation of fast-response scalability, insurers can be ready to support policyholders even when the claims overflow goes beyond their regular intake capabilities.

Looking ahead, proactive response and efficient service delivery will be more important than ever. Customer experience isn't just a strategy; it's a commitment to the communities we serve. With the right approach, companies can offer their customers peace of mind, showing that they are prepared to protect, support, and stand by them through every stage of recovery.