Wednesday, August 29, 2018

Weathering the Weather, Whether you like it or not.

I have been watching the reports with a bit of trepidation. So far, the Atlantic remains quiet. This has certainly not been the case for the Pacific. Hawaii just got struck with a storm causing flooding and wind damage. 

One thing is certainly true about the climate, there is such a thing as "Global Weirding". The patterns have been quite weird. Not just warmer - but that is certainly true, too. Don't know what tomorrow will bring. It's never been truer that we don't know what we don't know. Are temperatures going to keep climbing steadily?  Seems like it. Are the oceans rising? Most likely -- especially seeing the advancing melting of glaciers and the ice caps. 

When we are dealing with such uncertainty, and managing the risk of weather in the property and casualty business - it makes it harder to price policies to meet the needs and not put a company at risk.  Insurance rates are set (promulgated) based upon the expected occurrence of losses both in frequency and in severity. Costs are escalating due to the influence of inflation, increasing labor costs demanded by vendors, raising expectations on the part of claimants to have more and more covered by their policy, and by fraud. 

What we're left with is trying to be competitive against other company rates, offer a fair deal to our insureds, and keep the company's coffers from depletion following a catastrophe. Imagine selling a product for price, but you don't know its cost of manufacture until after a year has passed since you sold it?

Our new office is comfortable and our staff ready to serve.
But I have been in the insurance business as an agent for 32 years and I've sat on boards of  insurance companies for over 31.  Over the years, I have witnessed change happening at an ever increasing pace.  The volatility of weather patterns causing their severe damage is a major determinant of the cost of property insurance. That's why Texas is among the most expensive areas for homeowners insurance. Between hurricanes, hail storms, tornadoes and storm damage from straight winds and lightning - you just can't seem to get a gentle rain shower - without a lot of spitting, fussing and cussing from mother nature. 

So when a client calls with the question, "Why is my premium going up?" I have an answer, but they don't really want to hear it.  They just want me to listen to them complain - and find another company that has a lower cost. It's complicated. 

Monday, January 1, 2018

Revisiting this blog and another hurricane visits as well.

A major tropical storm targets the Texas coast near Victoria.

Apparently I only manage to return to this blog after major events.  We will try to change that. Actually, I was working on my class reunion and saw someone else link to their blog in an email. That reminded me that I had started this blog - so I went looking it up. Well, what do you know? It's still here. So I will link to it from my web site and try to post periodically. Please, let me know if you've checked it out!

But, back to the topic, we DID indeed have Hurricane Harvey hit us this August of 2017. Rather than a direct hit, it landed about 80 miles south of us, yet we were surely going to be impacted on "the dirty side" of the storm. We could certainly have been much more severly impacted, but by the time this slow moving storm came inland to Victoria from Rockport and Port Aransas, it had time to bleed off a deal of its original strength.

To be sure we did have damage to the surrounding structures and to some infrastructure, but it could have been so much worse. Tree fall was the worst effect from the storm. Citizen's Hospital had lost its bitumen roofing which enabled a ton of water to drain through the building and closing it down for weeks. A few other businesses had smaller leak damage occur.  Many homes and businesses received just minor exterior damage causing the need for spot repairs and some full roof replacements but not many when compared to the number of rooftops that could have been destroyed.  So, as I said, it could have been worse.

The loss of power for our city was just a matter of a few days for most. Further south, the power lines and poles were devastated -- and it took weeks to restore power. The second phase of this unrelenting storm came when it again struck Houston and Beaumont causing horrible flooding to areas that did not have a historically significant risk of inundation by flood. But this was no ordinary rain. It was greater risk than a "500 year return" event in probability. Residents living in these areas may never see a flood affecting them again in their life times. Or, it could happen again next year. That's the unpredictability of it - and a decent argument to provide oneself with flood insurance, even though you do not live in a special hazard flood area.

Others will better document the event to the region. I will leave that to them.

Running an office without power, phone or internet. 

Try as I did to prepare for the storm, the damage and the down-age will will occur none-the-less. I even put boards in the metal framed windows at my office. The only occupant to do so. But we lost all services to the building, and wouldn't it be my luck, mine was the only air conditioner to be blown over on the roof.

So, we struggled without air conditioning and worked in 90° in our office using fans until they could repair the AC six days after the storm. Meanwhile, we managed to be available to our clientele by forwarding our landline phone to a cell phone; we also used cell phones as wi-fi hotspots for our laptops which we kept charged along with running lights and fans plugged into a generator.

Thankfully, our primary carrier, Germania Farm Mutual was the first insurance company to set up a Catastrophe response trailer in Victoria.  So we were able to supply almost immediate response on the week following the storm. It felt good to be able to assure our customers and friends that help was available. Through adversity, our greater selves often come through and we all worked together to get through a difficult situation. It made me proud of the company I represented these many years.

Well, here's to a better year in 2018. How about we go one year with less storm activity? Is that possible?