Service, Come Rain or Shine
Published September 29, 2016 - Written by John Kett
Each year, insurance carriers shoulder billions of dollars in claims after catastrophic weather events. IAA’s John Kett discusses how to best manage vehicle recovery efforts during these events.
The subject of what’s going on outside our windows is a tried-and-true topic of discussion, so it’s hard to ignore the commonality of extreme weather events of late. In July 2016, The Wall Street Journal reported 350 natural disasters worldwide cost a total of $70 billion, up 19% from $59 billion in the same period in 2015.
There are many factors that contribute to extreme weather events, including increased population and greenhouse gas emissions. Additionally, NOAA data shows that since 1901, the average total annual precipitation has increased over land areas in the United States at a rate of about 0.15 inches per decade.
That doesn’t sound like much, but combined with warmer air, this precipitation can trigger patterns of evaporation that cause both flash floods and long droughts. IAA saw this up close very recently as we assisted with the recovery from flooding events in Texas and Louisiana this year. Texas, in particular, endured a yearlong droughtbefore it was lifted by sudden, severe storms and flooding. The devastating losses amounted to $12.3 billion overall, with insurance companies shouldering $8.8 billion of that total. Recovery from the devastating Louisiana flooding is ongoing at the time of this publication, but initial estimates put the cost at $10 billion.
The economic impact to the government in providing aid and insurance carriers processing claims can be staggering, so it’s no surprise that insurers have conducted their own research into how to most effectively predict and respond to catastrophic events. As these events can produce a tremendous volume of auto and property losses, insurance companies are preparing by establishing a network of support services.
This is where IAA is here to assist. As a salvage auto auction company, we’re also a catastrophe service supplier on the front lines to not only recover the influx of total-loss vehicles following an extreme weather event, but also selling those vehicles to maximize returns for our insurance company clients. This position affords us a unique perspective into the challenges we all face during the recovery process, so we have joined the effort in exploring how to best assist our insurance partners during these events. The IAA Catastrophe Services Team has been in the field for a number of extreme weather events over the years, and we refine our catastrophe strategy after each experience.
Effective catastrophe response always starts with planning, so IAA practices continuous preparation and relationship building with vendors year-round, constantly building our network of catastrophe tow operators and pre-identified inventory holding lots. We continue to evaluate our business plan so that we are prepared to operate, regardless of the nature and severity of the disaster.
When the disaster does strike, IAA understands that effective response requires both communication and resources. We follow a strict, cross-functional response plan that allows the organization to collaborate and determine the appropriate resources, along with the coordination required to distribute, stage and activate those resources effectively. A good catastrophe response plan is built around effective communication that will identify the required resources and provide those resources at the right time with the right information. However, each catastrophic weather event is unique. It can be difficult to anticipate the circumstances of each storm, so it’s also important that we exercise flexibility to efficiently adapt to each situation.
For more information, take a look at the article Pat Walsh, IAA’s Senior Vice President of Business Development, wrote for Carrier Management magazine. Pat spearheaded the IAA Total Loss SolutionsTM initiative and has worked hard to diversify claims services for insurance carriers. His extensive knowledge about the industry is evident in his publication, and I encourage you all to read it.
Catastrophic weather events can be devastating for the areas and communities affected, and determining the best way to respond can be a daunting task. IAA aims to provide the highest level of service to our insurance partners during these occasions through vehicle recovery, processing and auctions – the strength and success of which is borne from effective catastrophe planning and response.
PerspectivesRide-Hailing Part 2: Its Effect on Vehicle Miles Traveled
September 26, 2019
PerspectivesRide-Hailing Part 1: Its Effect on Vehicle Sales
September 18, 2019
PerspectivesTariffs & the Potential Impact on Auction Vehicle Prices
May 30, 2019