Homeowners Insurance
From Reactive to Proactive

• Kate Smith
• November 2019
• 

Last November's Camp, Hill and Woolsey wildfires caused more than $12 billion in insured losses. But for Hippo, an MGA offering homeowners insurance, the work of helping California policyholders began before the fires even reached them. Rick McCathron, chief insurance officer at Hippo, said insurers can use technology to assist policyholders both before and after disasters. McCathron spoke with ^AMBestTV at InsureTech Connect 2019, held in Las Vegas.

How can technology help homeowners before an event happens?

The real focus from anybody that provides homeowners insurance is they want to make sure that the customer's well taken care of. Over the years, it's usually been very reactive. It's been a reactive result to something that occurred.

At Hippo and other modern insurtech providers, what we're trying to do is be proactive. We work with various data sources to identify when an exposure is about to happen, when the claim is about to happen, and then reach out to our policyholders to make sure that they are well taken care of, even before they have a claim.

That is a differentiator, I think, of what technology can provide.

What kind of data sources are you using to figure that out?

We have automatic, real-time feeds with various weather providers, weather bureaus, with California Fire in the event of wildfire. The second we know the path of a storm or where a fire has popped up, we do an overlay with all of our customers. Then, we use an algorithm to determine which of those customers are in harm's way.

We reach out to those customers proactively, letting them know that there's an event on the way or an event that's popped up. Then we give them our advice of how they should handle their family, their property, what they should do to protect themselves.

Is that a phone call? Is it a text message? An email? How are you communicating with them?

A little of everything. We reach out to them electronically via email and text message. But we also take time to have our claims concierge pick up the phone, old fashioned. This is an empathetic approach. These are our customers. This is their most valuable asset.

More importantly, it's their home. It's where they raised their families. It's where they have their memories.

We want to make sure that we reach them and we let them know what's happening, what they can expect. If they need help making a hotel reservation because they're in evacuation, we'll do that for them.

Do they have pets? Do we need to make a reservation at a wag hotel or a dog hotel? Everything that we can do proactively—that involves, from our perspective, an empathetic human touch, which is a physical phone call.

Do customers want to hear from their insurer when something's about to happen?

The response from our customers has been overwhelming. They are very excited because they didn't know what to expect. They didn't know what they needed to do. We let them know what to expect.

They're very appreciative. Oftentimes they're trying to figure out, “Do I have coverage if I have to go stay in a hotel? Is there coverage for that?”

We're taking all of that uncertainty out of the mix. Then, we text them our claims concierge contact information. That concierge is assigned to them. They are available 24/7 during the entire process. If they need to call their claims concierge at 2 in the morning—maybe they said they didn't want the hotel but they need it now because they decided to evacuate—we stand ready to assist them. The response has been overwhelmingly positive.

Is there a way to use those data sources in terms of first notice of loss? Do you know they've had damage before they even call?

Yes, absolutely. There's a whole host of imagery, of data sources that we can use. More importantly, it's making sure that the customer is connected to you through that entire process.

We don't just call them at one particular time. We call them throughout the process, not in an intrusive way of trying to add stress to their lives, but removing it.

In California, when the wildfires hit last year, we were fortunate. Not a lot of our customers actually had wildfire claims, but a lot of them had smoke damage because they were close. They weren't even sure if that was covered for them.

We want to make sure that we let them know all the different aspects of protection that we provide.

When you're doing something like that, what kind of pressure does it put on your own resources? Are you staffing up or do you have enough people available who can handle the amount of communications you're going to have to put out?

We generally use our own people.

What we do is we take people off our sales queue to reach out to these customers proactively to make sure that they are well taken care of. I would rather not sell a single policy for a month if I can help one customer alleviate a challenge.

Thus far, we've been able to support the volume quite well and quite extensively, but we have significant plans in the event that we are just overwhelmed on how we can still provide the same level of service, the same level of communication with partners.

In these types of situations, do you have the autonomy to be going outside of the carriers that you work with to be having these interactions?

Yes, we do. We have some contractual requirements where we have to make sure the carrier is aware of what's going on. We have full claims authority to make sure that the customers are taken care of.

Even if one of our carrier partners decided it may be something they weren't comfortable paying, Hippo would go ahead and take the responsibility of that. Because, at the end of the day, the expectation of the modern consumer is much more of a proactive partnership, less of an insurance company telling the customer: “This is the way that you're going to handle this.”

Kate Smith is managing editor of Best’s Review. She can be reached at kate.smith@ambest.com.