Old issues, new perspectives

The 2007 floods presented disaster recovery firms with a number of capacity challenges. They also raised the question as to how long it should take to dry out a property, a question that still divides the industry today, as Alwynne Gwilt discovers

Last month, Environment Minister Hilary Benn told the House of Commons that thousands of UK residents were still displaced from their homes more than a year after last summer's floods, citing the fact homes had not yet dried out as the primary reason for this - a point that puzzled many who heard it (Post, 3 July 2008, p1). The statement also sent unsettling vibrations through the disaster recovery world, reminding it of previous years when the blame was more commonly dished out to their industry, creating a fear that all the hard work done last summer would be erased from people's minds.

But it also prompted a debate about how long properties should take to dry and how the industry - from insurers, to loss adjusters, surveyors and disaster recovery companies - can improve processes to ensure a happier outcome for the most important party: the policyholder. Arguably, policyholders are rarely privy to vital information that would allow a better understanding of what necessary steps need to be taken after a flood. "Most people will have an idea what it costs to buy a television if it gets stolen from their house; very few people know how long it should take to dry their property after a major flood event," explains Chris Netherton, managing director of the National Flood School. And though many in the industry would say the job done last summer was very good considering the scale of the flooding, most sides agree that issues remain that need to be resolved before another major disaster of similar magnitude strikes.

"There were 10 times as many jobs as we could cope with; there was just too much," says Shaun Doherty, managing director of disaster recovery company ISS. Remembering back to the chaos last summer, he adds: "Normally we'd be looking at projects in 24 hours and instead we were looking at them after five days. Sometimes you couldn't even access the area: phone lines were down and mobile networks were jammed."

Disaster zone

According to many commentators, this issue alone was a major contributing factor as to why flooded houses were even more difficult to clean up and dry out after the rains stopped.

"It's almost like an ambulance service: if you get to a heart attack victim quickly, you have a better chance of saving them than if you arrive after an hour," summarises Chris Head, company director at Davies Response.

As water inundated homes, disaster recovery companies could only do as much as their equipment could handle. And there simply wasn't enough of it. Some even brought in equipment from other countries to attempt to dry out the homes more quickly.

But this still leads many to question why, as Mr Benn stated, people could remain displaced a full 12 months on. Are there genuine reasons why properties would not have fully dried a year after being flooded? After all, Mr Benn said this reasoning had been given to him by the insurance industry itself. "I don't think there is any justifiable reason," says Simon Berry, managing director at disaster recovery company Continuity, which specialises in commercial properties. "We handled drying out Tirley Church, which was flooded to a depth of more than 1.5m and it was dried using air movement equipment alone in less than 70 days. How there are still houses that are uninhabitable is extraordinary."

Mr Netherton agrees, adding: "A major flood event should take approximately 21 to 28 days to dry. Add in some time-lag for resources being stretched last year and we should seriously question any claim that took longer than three months to dry during summer 2007."

So why have large numbers of customers had to go without the comforts of home for so long?

Too little, too late

One difficulty arises from only recognising problems later on, according to Norwich Union, because damage is not always noticeable right away. "One of the things we found relevant was that, for the properties that aren't dry, this is because we have only received notification in the last two to four months," says David Eldridge, NU's supply chain manager. Such late filing of claims may occur because the policyholder hadn't initially come across any damage and believed their property to be fine.

Another reason stems from differing building types. A new build home will react very differently to a listed property, for example, and getting things wrong on the latter can cause serious problems.

David Williams, Axa's managing director of claims, recalls one incident clearly. "There was a claim (on a hotel) where we consulted experts and used some innovative equipment designed to dry out properties considerably more quickly."

Unfortunately, things went very wrong and this method damaged all the paintwork in the old Victorian property, leading to much higher costs and a sceptical view of the latest technology that promises such quick results. "If you were able to stick a house in a microwave you might be able to dry it out quickly, but it could cause a lot of damage," he adds.

The incident Mr Williams describes is perhaps indicative of a lack of understanding by various parties involved or an accidental oversight. After all, many damage management companies have hailed the invention of heavy-duty quick dry systems, a point that only prompted more criticism of Mr Benn's comments around creating better technology. "There is technology coming out of our ears; it can already speed dry buildings but why doesn't it happen?" asks Dr Greg French, director of Davis French and Associates. "The simple answer is that to speed dry costs more money." He also believes there are questions surrounding the desire to get properties dried quickly, saying: "For the surveyors and the builders to advocate more sophisticated drying jobs is a little bit like turkeys voting for Christmas: it's not in their interests," he claims.

Money down the drain

Dr French pushes this point by saying that money inevitably creates problems - an issue raised by others in the industry. Bill Lakin, technical and training director at Homeserve Chem-Dry, says the equipment being available doesn't guarantee its use. "There are machines that are incredible but it's horses for courses, isn't it? That equipment is expensive."

And Dr French's criticisms do not stop at vested interests and associated costs. He also claims that changes to workflow management in recent years contributed to the long-term displacement of homeowners following last year's floods.

Ten years ago, he says, there was generally one adjuster on a claim who handled everything from appointing the damage management company, to the builders and surveyors. But, he adds, as insurers have scaled back on costs, most have adopted a supply chain process to control that spending. "Insurance companies buy restoration services in one silo and building and surveyors in other silos, completely separating out these elements.

"In buying them separately, the criteria for purchasing any of these services has become commoditised and everyone knows you buy commodities on the basis of price," he states. As such, he believes, the services rendered may not be the best quality, and the communication between parties is fractured, controlled as it is by various managers.

Mr Williams agrees to some degree, saying concerns about the number of managers is a valid observation. "We've tried to get around this in a number of ways, none of which have worked," he explains. "We've tried to find companies that could do everything or gone to others that would sub-contract bits." Nevertheless, he adds, putting one adjuster in charge is also not necessarily the best option. "We need supply chain transformation," he states.

Focus also needs to be placed on making sure the people involved in clean-up know what they are doing. Steven Richford, managing director at Richfords Fire and Flood, refers to his surprise at coming across one particular incident in the North-east last year - a time when making a mistake was a critical hindrance to getting people back in their homes. "Our company was asked to attend a site in Hull following the flooding where a building contractor was unable to successfully dry the concrete slab of a high net worth property. We arrived on site to find that the building contractor had hired a mini-digger, driven it inside the property and proceeded to remove the slab, causing thousands of pounds of extra work and alternative accommodation costs. We tested the small area of slab that remained with a digital hygrometer, and found it to be dry," he recalls.

Another drying expert, who wishes to remain unnamed, says he too is often frustrated at the old-school technology some people consider capable of doing a job right. "There are a lot of surveyors who don't even come equipped with water meters; they just use the old trick of putting their hand against the wall to feel for dampness."

Mr Head adds to this point by saying that simple lack of communication was frequently an issue last year. "We'd have surveyors going in and telling builders they had to rip everything out and it was quite gutting really. You could get places dried fairly quickly and then find out the family was out of their house for six or seven months because builders had ripped it apart," he says.

But the blame can just as easily be pushed back on the damage management companies. Mr Williams, for one, voices his frustration at incidences last summer when protocols weren't being followed. "I had more problems with what we were trying to do because experts were issuing drying out certificates too early," he says.

Future recovery

Instead of recalling only the problems, however, it is important to look to the future and some commentators believe there are multiple ways to improve things.

Mr Netherton says there should be greater emphasis on educating all parties involved in the clean-up process. "There is a general lack of knowledge as to what constitutes a reasonable drying cycle," he says. "We fill our 'flood house' with 1500 gallons of water and can dry it in four days using traditional refrigerant dehumidifiers. We have also dried the flood house in 18 hours, using just fresh air by opening the doors and windows in appropriate weather conditions. So, it's technical competence that drives speedier drying, nothing else."

Over at the British Damage Management Association the focus is firmly on education for all sides. "It is essential insurers understand the critical procedures required and have confidence in their judgment when appointing contractors," says Jonathan Davison, the BDMA's strategic development director. The body is currently delivering a specialised training programme to address these issues.

In the end, as any good counsellor may suggest, there is one glaring factor that makes any relationship turn sour: lack of communication. By improving that, argue most, the industry would fare much better should another major disaster strike.

"Dr French is quite right," comments Martin Milliner, head of claims at LV. "The way forward is not having the three areas of expertise making decisions in isolation. Those sorts of issues can be headed off at the pass." As LV rushed to sort out flooded houses last year, Mr Milliner says the company's strategy became about working in tandem. "By meeting on day one and taking an agreed plan forward, on average, the life cycle for claims has gone down 20% to 25%," he says.

Mr Williams says Axa has created what it calls the 'promise team' to aid policyholders affected by water damage in their understanding of the process. "It might sound a bit fluffy-bunnyish," he says, "but putting a team in place that is responsible for contacting individual suppliers and contractors and speaks to the policyholder each week has worked tremendously well."

Technological focus

He adds, as part of his belief about the need for supply chain transformation, there should be a greater focus on technology to link up various suppliers' computer systems, so each party can effectively communicate. "Then we can also get progress updates. We could use text updates too," he suggests.

Whether or not it would be effective to create an industry panel - where various parties could meet up to discuss problems and strategise for the future - is contested because there are many variables in household claims that could make it tricky. "An agreement would help if you had a standard practice, almost a contingency plan for major flooding," says Mr Head. "It would be brilliant in some respects but insurers look at each claim differently because policy cover has a lot to do with what you can do in a claimant's house."

Regardless, Mr Milliner says that by sharing information, and reducing the desire to criticise, everyone would be better off. "I would agree that it would be helpful to pool our lessons learnt and develop some best practice so we're better prepared next time. I don't think there's necessarily a competitive advantage to be gained by holding back that information. Sharing it and ensuring we've got the right information will help protect the insurance industry's reputation when events like this do happen."

  • LinkedIn  
  • Save this article
  • Print this page  

You need to sign in to use this feature. If you don’t have an Insurance Post account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: