Wildfire Claims Complexity Driving Innovation in Loss Adjusting

Greater complexity in insured losses from forest fires is leading to increasing innovation in loss adjusting, according to Cunningham Lindsey’s 2017 Major and Complex Loss Review. The annual report highlights many examples where increasingly complex losses have led to new and innovative ways loss adjusters are having to evaluate and manage claims.

The report highlights the issues surrounding last year’s Fort McMurray fire in Alberta, Canada. The cause of the fire is unknown but insured losses mounted significantly as very dry conditions, strong gusty winds and pine forests combined to aid the fire’s progress, engulfing communities and businesses. The fire led to around 44,000 residential, commercial and motor insurance claims.

Cunningham Lindsey’s report highlights the need for loss adjusters to work in shifts due to the remoteness of the affected area, lack of local accommodation and the no-fly zone in place. This also prevented their adjusters from using drone technology to assess the damage.

“Our ability to arrange access with the local authorities for our team of specialists into the affected area before the evacuation order was lifted was crucial. This enabled us to undertake loss assessments and help get businesses operational and homes habitable as quickly as possible, ” said Albert Poon, Cunningham Lindsey’s Canada president. “It’s clear from our report that the role of loss adjuster is changing as the nature and complexity of insured losses facing the insurance industry evolves. We are seeing more innovative approaches emerge, reflecting the changing nature of the claims being managed.”

The company noted there were 27,000 residential property claims, 5,000 commercial property claims and 12,000 motor claims as a result of the fire.

The report also illustrates the use of aerial photography and thermal imagery to more accurately assess levels of damage, for example the age of trees affected by forest fires. Being able to accurately assess the age of fire damaged trees enabled adjusters to calculate reforestation costs, which depend on the time taken for new trees to reach the age of the burnt ones.

Source: Cunningham Lindsey