On the front lines



When Nicole Deitz awoke in her Fort McMurray home on May 3, 2016, the day began as normal. She and her husband went off to work; her children, aged 12 and 15, travelled to their respective schools in different boroughs of the city.

“There were blue skies,” says Deitz, office manager and broker at Rogers Insurance Ltd. “You could see smoke in the background, but it was nothing too serious. We’re used to smelling wildfire smoke. We couldn’t see a fire.”

Within hours, the situation would evolve rapidly. By 1 p.m., a mandatory evacuation order went out to the city of nearly 90,000 residents. Originating in the Regional Municipality of Wood Buffalo (RMWB), flames rapidly engulfed the western suburbs of Abasand and Beacon Hill before moving steadily east and eventually jumping the Athabasca River and heading toward the town’s only major north-to-south highway. Flames several storeys high severed access in a city constructed along single-access transit routes, prohibiting access in and out of various neighbourhoods.

Deitz’s son was at elementary school southwest of the downtown Beacon Hill area. Deitz was at Rogers’ satellite office northwest of the city centre.

“I started sending emails to the head office in Calgary at 1:30 [saying], ‘I need to close the offices and get my staff out of here.’ ”

An hour later, once she’d accounted for all staff in the two Rogers Insurance offices, Deitz went to collect her daughter from high school. They set up a rendezvous point with her husband, who’d had just enough time to collect the camping trailer. Along with thousands of others, the family headed north in a convoy on Highway 63—the only accessible route out of town from their location—to a pull-off site at Crane Lake, 37 kilometres from Fort McMurray.

Unable to breach the wall of flames dividing the city, they were separated from their 12-year-old son, who’d been picked up from school by a friend and headed south toward Edmonton.

“I wasn’t scared for him,” says Deitz. “I knew he was safe. I knew he was with friends. He was the only one who got into our house before the evacuation. He got our suitcases.”

$127 million

Insured damage resulting from the two most significant wildfires in B.C. earlier this year.

Source: Ernst & Young 2014 Global Consumer Insurance Survey

Insurers invited to the table

The next few days would see a rapid response from government, emergency crews, and the oil and gas industry. And, in an unusual twist, insurers were also invited to be part of the crisis management efforts. Many in the industry say this precedent-setting move was a positive one, allowing emergency funds to be channelled effectively and claims to be submitted more quickly, and offering creative solutions to clean-up and rehabilitation efforts.

“Disaster happens and usually the insurance industry is on the other side of the glass, banging on it to be let in, shouting, ‘We have information to share, we want to help, let us in,’ ” says Bill Adams, vice-president, Western Canada for the Insurance Bureau of Canada (IBC). “Normally, when the threat abates and the incident is under control, that’s when people look around and say, ‘We need to get the insurance industry involved.’ By then, it’s too late.”

In May 2016, however, a new precedent was established when Alberta Emergency Management Agency invited IBC and others to be on the ground in Fort McMurray within days of the evacuation order. Representatives from insurers and brokerages were also part of the crisis-response personnel in the emergency operations centre.

“For the first time in this country’s history, there was an IBC representative involved in the multiple daily briefings that took place,” says Adams.

“Somewhere at the front end, we need to do a better job as an industry in ensuring people are informed at the time of purchase about the details of their coverage.”

The presence of industry inside the war room meant insurers and brokers could proactively engage clients from the outset. RSA reached out to 1,300 Fort McMurray clients by phone and email within 24 hours of the evacuation.

“We immediately sent adjusters to evacuation centres in Edmonton, which was communicated through social media and formal news delivery systems,” says Anthony Black, national catastrophe manager for RSA. “We were able to be where the people were so they could come to us and we could make sure they had emergency funds—cheques or pre-paid credit cards— customized options for people to meet their needs.”

Having industry personnel on the ground helped brokers and clients better understand the full impact of the crisis, says broker Janis Losie, director of member relations, community relations and marketing for the Insurance Brokers Association of Alberta (IBAA).

“I was in Fort McMurray a week after the evacuation took place,” says Losie. “We toured neighbourhoods that were completely gone. The devastation was complete.”

With that first-hand knowledge, the IBAA, IBC and their members could control information output, correct misinformation quickly, prepare for the workload coming and find creative solutions to claims management, says Losie.

“Traditionally, people are so overwhelmed and there are a lot of emotional reactions. It’s not unusual for people to view insurers and brokers with suspicion,” says Losie, who notes the IBAA sent logoed trucks to emergency shelters with water and gas supplies. “But I think, by and large, people were heartened by the fact that the insurance industry got in there quickly and
found creative ways to get them money, regardless of what the policy said, and get their claims resolved as quickly as possible, regardless of the circumstances.

1,214,772

Hectares burned by B.C. wildfires in 2017, as of Oct. 12

Source: B.C. Wildfire Service

“We also very clearly got the message out that we would not be rebuilding entire communities in months, but that it would be a very long rebuild process. Because everybody talked about that from the beginning, people were mentally prepared for the long haul.”

Having insurance represented meant easing the re-entry process that would occur for the majority of Fort McMurray residents a little over a month after the evacuation.

“We were part of the hundreds of insurance industry personnel in Fort McMurray, working on re-entry logistics, accommodations and clean-up,” says Black. “We knew that insurance policies have certain conditions for people returning following an evacuation. One of the key things IBC coordinated was a white goods pick-up program, to collect and dispose of 12,000 contaminated fridges and freezers, something that’s mandated by insurance. We couldn’t have coordinated this if we weren’t on the ground.”

Risk management

The emergency response in Fort McMurray has been credited with evacuating tens of thousands of people without incurring a single death. But the clogged highway and the total incineration of entire neighbourhoods has also been held up as an example of emergency preparedness gone wrong.

A provincial government report leaked to media in June 2017 was scathing. It highlighted a lack of coordination among provincial, regional and municipal fire crews, which delayed emergency response and sent mixed messages regarding evacuation efforts. Municipal crews in RMWB, fighting the fire to the northwest of the city, were not party to critical information that would have allowed them to move in and contain the fire sooner.

“People are often happy to complain or commiserate with a neighbour over the fence when they have questions, which often leads to them lashing out at a broker.”

“Rather than learning about the wildfire’s imminent incursion into Fort McMurray through the ICS (incident command system), the RMWB operations chief discovered the wildfire was in the community through public reports over social media,” the report said.

A further audit commissioned by the municipality, conducted by KPMG and released in July, was equally harsh, painting a picture of mixed messaging to the public and an unnecessarily chaotic evacuation, with most people leaving their homes ill-prepared and clogging the city’s only transit artery for days.

Those in the insurance industry recognize that governments at all levels must work more cooperatively with emergency response and insurance to put better risk management practices in place.

“To be effective, everyone needs to work in tandem; we can’t work in silos,” Black says. He adds that the shortcomings in Fort McMurray have since contributed to significant cooperation between insurance and governments in dealing with catastrophic situations, evidenced by more timely evacuations during the B.C. wildfires this year. “We are seeing a rise in extreme weather events globally. We cannot control the frequency of those events, but we can put preventative measures in place to lessen the severity of their impact.”

5,243

The number of forest fires in Canada in 2016.

Source: Natural Resources Canada

A role for brokers

On May 4, 2016, Deitz and her family woke at 4:30 a.m. to make their way south through the city predawn, while the fire was temporarily dormant, and reunite with their son.

“It was a war zone,” says Deitz. “Burned trees, a bus stuck in the middle of the median—people must have had to run. Cars, half melted, abandoned everywhere— people ran out of gas and just hopped in with people.”

A look back at the video surveillance of Nicole Deitz’s home on May 3, shows her 12-year-old moving systematically through the house, grabbing suitcases, his older sister’s makeup bag, an other things he felt his family would need. “He was the hero of the family, really,” says Deitz. “The only time he called me crying was when he thought maybe he forgot our passports in the house. But I told him, if he got the suitcases I’d prepared, he had all the important documents in there as well.”

But the Deitz family are an anomaly. Client interactions in the aftermath of the evacuation demonstrated once again that the majority of clients don’t have a clue who their insurer is, nor what their coverage includes.

“People’s insurance literacy and their financial literacy is low,” says Adams. “People don’t differentiate between their broker and their insurer. Sometimes they recall a logo or a colour associated with insurance, but there is a void of knowledge. Somewhere at the front end, we need to do a better job as an industry in ensuring people are informed at the time of purchase about the details of their coverage.”

“I think brokers have a significant opportunity to enhance the value proposition by making certain they act as a counsellor for their insured.”

“I think brokers have a significant opportunity to enhance the value proposition by making certain they act as a counsellor for their insured,” Adams adds. “That includes making sure clients have a basic understanding of their policy, what it covers and also what it doesn’t cover. People don’t pay attention until they have to pay attention.”

The broker response at Fort McMurray was “immediate and excellent,” adds Losie, noting brokers rallied staff from across the country to reach out to clients and get claims through quickly. She adds, however, that there is room for improved client interactions between policy renewals.

“Brokers would love people to call them when they have a question or a concern,” says Losie. “People are often happy to complain or commiserate with a neighbour over the fence when they have questions, which often leads to them lashing out at a broker. Perhaps brokers could do better to reach out and to get the message out that clients can reach out with questions—‘If you have an issue, if you want to talk, we’re here for you, don’t be a stranger.’”

With tens of thousands still displaced, Deitz says it reinforced for her the need for brokers to educate clients on how they can get the most out of their own policy—making lists of property inside their homes, and having business continuity plans in place so they can account for staff and operate businesses remotely, if they have to.

“Follow up with clients,” says Deitz. “At the end of the day, it’s the personal touch that brokers offer. People need that.”

Brokers can’t underestimate their role as the localized conduit between clients and the complex world of insurance, she adds.

“We understand our clients better than anyone,” says Deitz. “Nobody in Fort McMurray lets their gas tank go below half anymore.”

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Copyright © 2017 Transcontinental Media G.P. This article first appeared in the November 2017 edition of Canadian Insurance Top Broker magazine

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.