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Insurance claims keep rising in Puerto Rico after Hurricane María

By on December 8, 2017

SAN JUAN – The executive director of the Puerto Rico Insurance Companies Association (Acodese by its Spanish acronym), Iraelia Pernas, said Friday that some 200,000 claims have been made and, as the island’s power service and communications are restored, that number will rise.

“It is premature to give an estimate of the damage Hurricane María left. Until the electric grid is restored, we will not know its real scope. The losses are, without a doubt, much greater than those of [hurricanes] Hugo and Georges combined,” Pernas said in a written statement.

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She said the most conservative estimates peg María-caused damage at $16 billion to $20 billion, according to consulting firm Estudios Técnicos. Catastrophe risk modeling firm RMS estimated $30 billion in damage.

Moody’s Investors Service estimated infrastructure and production losses at $95 billion. Meanwhile, AIR Worldwide, another catastrophe modeling firm, estimates industry insured losses for María in the Caribbean will be between $40 billion and $85 billion. Puerto Rico accounts for more than 85% of the loss.

She explained that the losses resulting from Hurricane Hugo were calculated at $4.2 billion and insured losses at $800 million, while for Georges the damages were estimated by the Federal Emergency Management Agency (FEMA) at $5.7 billion, of which about $4 billion consisted of structural damage and housing, and $350 million in damage to the electrical grid.

She also noted that, historically, greater economic growth has been observed in Puerto Rico in the immediate aftermath of a hurricane, due to the payment of claims, which increase economic activity related to construction and other repairs.

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“Without a doubt, the insurance industry will play an important role in the reconstruction of Puerto Rico and its economic development, and has been working tirelessly since Monday, September 25, five days after the hurricane hit us. The situation the insurance industry faced like the rest of the country in the first three weeks was the problem of lack of fuel, electricity  and communications, which still persists in many areas,” she said.

To address the avalanche of claims, she said, insurance companies have established customer service offices in different regions around the island and extended service hours.

In addition, each company has broadcast notices on radio and the media, urging those who have claims to contact them by either email, telephone or social media.

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“The insurance industry is adequately capitalized to face the insured losses, but it is a process that takes time, and insurers’ response time will depend on the magnitude of the natural disaster. The intention is to pay as soon as possible and in a fair manner according to the terms of the policy,” Pernas said.

“One of the greatest losses is homes, but we understand that the biggest economic impact will be the interruption of business,” Pernas said, adding that the insurance “companies are more than prepared to handle claims by hiring additional personnel. New direct and indirect jobs have been created, including adjusters, inspectors, accounting engineers and architects.”

Pernas indicated that in many cases one of the issues insurance companies are encountering is access to insured properties in affected areas and difficulty in contacting claimants due to the telecommunication problems.

Meanwhile, she explained, the health insurance sector took  multiple measures before the emergency to ensure the continuity of service. The main insurers have kept operations running with diesel generators amid the collapse of the electrical grid.

Ante la crisis en los sistemas de comunicación, y para garantizar la continuidad del cuidado de salud a sus asegurados, durante la emergencia, se adoptaron las siguientes medidas:

Before the disruption of communications, and to guarantee the continuity of the health care for their policyholders, Acodese said the following measures were adopted:

  • The pre-authorization requirements for covered services and procedures were made more flexible.
  • In the pharmacy area, preauthorizations were not required, and coordination with pharmacy benefit managers helped transactions be processed quicker.
  • The care of dialysis patients was coordinated to ensure treatment.
  • Insurers made space available for providers to process billings, presenting their claims for services through the billing intermediaries.
  • Insurers stabilized primary health services, prioritizing payments to suppliers and integration with community activities to promote health education, vaccination, access to mental health, primary medicine and pharmacy services.
  • Insurers have taken water and supplies to communities throughout the island.
  • Insurers offered support to providers that did not have how to care for their patients, either because they could not open their medical offices due to lack of electricity and fuel or because of limited services at hospitals, among other reasons.

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