Let me begin by thanking each of you for working so hard in 2017 to help us put so many of our policyholders back on their road to recovery. Adjusters are a critical stakeholder group to the NFIP; you, many times, are the first face of the NFIP that our policyholders see.
As we all know, this year was the third-busiest claims year in NFIP history with over 123,000 claims. Hurricanes hit Texas, the Gulf Coast, Florida, the Caribbean and the Atlantic Coast. And, there were also many smaller floods nationwide, and those folks got the same level of service as the ones hit by the big storms.
I’m very proud of the NFIP, and all our partners who worked hard during this active claims season, which trailed only the 2005 and 2012 hurricane seasons. At the end of 2017, the NFIP paid nearly $9 billion in flood insurance claims, and we anticipate a total payout of $10.1 billion.
We were able to offer a larger volume of advance payments, which included higher dollar amounts. In the first 30 days of Harvey, the Program paid over one billion dollars in advance payments – that is unprecedented! Now, let me take a few moments to talk about the future of the NFIP. In 2017, the National Flood Insurance Program committed to a multi-year effort to close the insurance gap across the nation. We call it our Moonshot.
Through FIMA campaigns to increase the policy base, WYO and private flood insurance market growth, and new and renewal policies resulting from significant recent flooding events, the NFIP is reaching for the moon by declaring that we will double the number of structures insured against flood risks by 2023.
Simply put, we know insured survivors recover faster and more fully from a flood than uninsured survivors. We are driven to build a culture of preparedness, be ready for catastrophic disasters and reduce complexity for our policyholders and stakeholder partners.
Doubling the number of properties covered will require an increased need for qualified adjuster resources to serve insured survivors throughout the U.S.
We encourage adjusting firms to lean forward on recruiting, training, mentoring, and retaining a cadre of survivor-centric flood adjusters and support staff who are ready to provide our insured survivors with best in class customer experience.
FEMA is responsible for ensuring that the policyholder receives every dollar that they are due and that taxpayer dollars are spent responsibly under the law.
Our goals are attainable when we continue to explore new approaches and build new ways to deliver on the promise to our customers. But, FEMA cannot reach these goals without you.
FEMA recognizes the importance of its partnership with the adjusting community and the vital role that adjusters have in helping insured survivors recover from the devastating impacts resulting from flood events. Let me share some of the critical factors in that relationship and its importance to the NFIP.
The NFIP can be confusing. We look to NFIP adjusters to serve foremost as the insured-survivors proponent. You must be professional and possess the training needed to provide exceptional service throughout the claims experience, and manage the policyholders’ expectations for their claims handling.
Together we must continue to refine the claims experience for our policyholders. In 2017, the adjuster community and our policyholders, benefited from many of the enhancements that came out of our collaboration with program partners, which included adjusters, agents, WYOs, and vendors. The enhancements implemented in 2017 included:
- Proof of Loss (POL) waiver
- One year POL extension
- Use of electronic signatures
- Pre-inspection advance payments
- Larger advance payments
- Building Valuation Loss Assessment (BVLA)
- Streamlined prior loss handling
- Contents grouping
- and Special catastrophe adjuster fee schedule
This year, we will introduce the new Claims Manual that for the first time will speak to both Adjusters and Examiners and will incorporate the WYO Bulletins that speak to guidance, processes and procedures. The new Claims Manual will allow us to issue timely updates, provide clarification of procedural processes and foster consistency in claims handling throughout the Program.
Another goal is to see a reduction in appeals and litigation. We can accomplish this by providing consistent and uniform messaging throughout the NFIP, with our policyholders and our program partners. It is imperative that with every contact you have with the policyholder that you spend sufficient time explaining the process, coverages, and setting expectations. Timely communication is key to establishing a relationship with the policyholder and instilling confidence, and leads to a positive claims experience.
In 2018, we are also undertaking a review of the three NFIP policy forms, which will introduce plain language and formatting and be more in line with other P&C lines of business.
We have made significant progress in the past year in proactively reaching out to policyholders and program partners providing one trusted source of information – information that is clear, straight-forward, and timely. This proved to be helpful in closing claims with a good customer experience. The messaging included topics such as “Understanding Flood Loss Avoidance for Policyholders and Agents”, What to do After a Flood”, “How to File Your Flood Insurance Claim”, “Who’s Knocking At Your Door”, “Mold Safety”, “10-Step Flood Claims Process”, and an updated Claims Handbook for policyholders.
We will continue to rely on the adjusting community to provide vital information to policyholders, especially about existing mitigation opportunities like Increased Cost of Compliance (ICC). Insured-survivors can use their ICC benefit along with a claim payment to build back stronger and protect their property against future flood risk. ICC may also afford a policyholder with a greater opportunity to be strategic in their recovery, choosing to flood proof, relocate, elevate or demolish their property instead of rebuilding in harm’s way. If they do not know their options before they get their claim check then they are not fully empowered to recover to their new normal.
In this instance, and many more, the adjuster has a special trusted relationship with the policyholder; and has the information that the policyholder needs to navigate the claims journey to recover in a way that protects their biggest investment – their home – and most important – their family - against floods.
The NFIP is building value and trust by streamlining systems and procedures; developing a more robust product suite; focusing on customers throughout the many journeys policyholders go through during purchase, renewals and claims.
We are focusing all outward-facing communications products squarely on existing and new customers by eliminating jargon and legalese, making products available in multiple formats and languages and embracing the use of social media and digital technologies to meet the needs and styles of 21st century consumers.
This improved messaging, and these enhanced processes lead to a better program that is more transparent, better coordinated, and more collaborative with our partners, leading to better consistency and uniformity, which is important to the claims journey and improving customer experience.
Providing a large-scale insurance program to millions of policyholders requires dedication to quality service and consistent program oversight. This includes the need to continue random claims quality check reviews at the individual adjuster level to evaluate quality and adherence to the NFIP guidelines, and identifying both good and bad trends – continuing the good ones and working hard to remove the bad ones.
Let me end with one last point.
Let me end with one last point.We all of us, need to fundamentally shift the culture to ensure Americans are willing to buy a flood insurance policy to protect their homes while reducing the economic dependence on the Federal government. Claim time is when policyholders really understand the value of the insurance policy purchased and their claim experience will either build trust in the NFIP or not.
I’m asking you to do your part in hitting our Moonshot by reinforcing the value and building trust in the NFIP.
We solicit your support and continued diligence and dedication to work with insured survivors and assist them on their road to recovery.
You are the face of the NFIP.
What you do every day in support of the NFIP has a direct impact on our successes, and instills confidence in the NFIP brand.
Thank you for your continued commitment to providing world-class service to our insured survivors.