Narragansett Bay’s CEO Todd Hart recently published a letter to their agency/brokerage partners and clients regarding Superstorm Sandy. It reads as follows:
“I would like to update you on NBIC’s response to Superstorm Sandy.
Our primary focus has and remains servicing our policyholders with losses. We are triaging claims by severity-most to least-but unfortunately the volume exceeded our planning. This, combined with communication breakdowns in the North East, strained our response. The result was telephone calls dropped, backlogged, and abandoned as well as some delay in adjuster assignments. This initial challenge was brought on by the size and severity of the event and is neither representative of our goals nor the capability of our CAT team members. Regardless, you and many of our customers did not get service quickly enough. For that, I apologize.
While we began roughly, I can assure you that we have adapted and are making progress. Since Oct 29, NBIC has taken over 90,000 phone calls and created over 17,000 claims files. Our dedicated CAT response team led by Brendan Voss has assigned over 14,000 claims to our army of field adjusters and examiners. We have made a variety of changes to improve our process, including a Dedicated Policyholder Call Center for Sandy inquiries (800-343-3375, option #7), web-based agency claims filing, ready access to flood denial letters to allow policyholders to start their flood or FEMA claims quickly, and a dedicated agency only “hot line” (401-495-6057) in need of assistance. Most importantly, we have advanced much-needed funds to policyholders for temporary living, risk mitigation and debris removal.
We still have an unacceptable backlog of claim assignments; however, we are driving that down quickly and also carefully. Our claims team is working multiple shifts, over the weekends and through the Thanksgiving holiday. I have asked Brendan to ensure that we have made initial contact with all claimants by no later than Thanksgiving. He has challenged his team and our adjusters to make that happen.
We are absolutely committed to treating each and every customer interaction professionally and with compassion. We also are realistic that our service from time-to-time may not meet the high standards we set for ourselves and you expect from NBIC. I do intend to use this and your feedback to improve our products and services for our agents and our customers.
Our second and close priority is to ensure timely payment of claims. NBIC’s financial condition remains strong.
While it is early to provide specific figures, we do expect a significant loss from Sandy. However, we are quite confident the loss will remain well within NBIC’s reinsurance program, which is placed with “A-minus” rated or higher reinsurers. We have and continue to have regular communications with our reinsurance partners. They have appreciated the detailed data and risk information created by our ShelterPride® inspection process that generates good insight into loss development and aides them in managing their portfolio.
Our balance sheet is quite liquid. NBIC’s strategy is to take cat-exposed insurance risk, consequently, we maintain NBIC’s investments in short-term, high-grade fixed-income bonds. In addition, some of our reinsurance partners have begun to advance funds to NBIC in anticipation of claims payments, so we expect have more than sufficient liquidity to handle all current and expected future claims.
Finally, NBIC has well capitalized investors, highly sophisticated and experienced with cat-exposed insurance business. Since 2008, they have made investments in support of NBIC’s growth and most recently in response to Irene in 2011. As part of our normal course of business, we were already working with them to define the business and capital plans for 2013.
Our third priority is getting back to business. We have in place a new business only moratorium for New York and New Jersey. We have chosen this path for two reasons; First, to ensure that all of our efforts in those two states are focused on servicing Sandy-impacted agents and their customers, and second, we are giving our proprietary inspection capability, ShelterPride®, time to become fully operational before we reopen for new business. It is proving its worth in this event. We want to ensure that we continue to underwrite responsible homeowners and we expect this situation to be resolved in the upcoming weeks.
We are open and looking for new business in Rhode Island and Massachusetts from our agency partners. Sandy had less impact on these states. As a consequence, NBIC can underwrite and inspect in the normal course.
Thank you for your patience and support in this challenging time. NBIC was built to meet the insurance needs for responsible homeowners. We intend to make good on our commitment but recognize that a storm with the enormity of Sandy has and will test all of our capabilities. With your help, I am sure we will pass the test.”
We will continue to monitor NBIC updates and will resume writing new business with them in New York as soon as they have lifted their moratorium.