Surging ahead

Introduction

Surge events are the true test of a supply chain and, as adverse weather events become more common and the capacity across the property claims industry continues to contract, it is extremely important for insurers and loss adjusters to understand how their suppliers will perform in surge.

At MA Group we are in the fortunate position of having three supply chains that deal with different stages of a property claim – Virtus Validations for surveying and validation, Revival for fire and flood restoration and MA Assist for property reinstatement. Each of these supply chains is affected by surge at different times and the impact on each of them varies depending on the type of surge. For example, Virtus gets very busy during storms because this sort of surge relies heavily on surveyors in the first few days, however Revival gets very busy when there are floods. In most cases MA Assist doesn’t feel the impact of a surge for a few weeks after the event. This means we have a lot of experience in all types of surge and have flexible resources that can be redirected to wherever they are needed.

This paper sets out how MA Group manages surge, focusing on Revival and Virtus where performance is critical in the first couple of weeks following a surge event. We provide details on how we measure surge and available capacity, how we predict demand and create the extra capacity needed to deliver in surge. We also provide details on how MA Group has performed in recent weather events, showing how we have surged ahead of the competition.

Surging ahead

There is no consistent industry-wide definition of a claims surge and every insurer has a different answer when we ask them for a definition. Every client contract has their own measure of surge and a different way of measuring performance during surge. This creates further challenges when trying to predict and manage demand.

Having analysed our claims data over many years we believe a network should be able to stretch to a certain capacity and that anything above a 140% increase in volume, value and time constitutes a surge. However, it’s not quite as simple as that.

The time period is important – a 140% increase in volume over a couple of days is probably not a surge. Also, suppliers can still be experiencing surge conditions for weeks after the initial spike in volumes coming in as they work through the WIP. We also have to consider the time of year – an increase in claim values after a few quiet months could appear to be a surge but is actually just volumes returning to a normal level.

Surge plan

Our surge response strategy involves:

A predefined and clear plan for fulfilling surge capacity and maintaining service levels.
Using trend and weather predictions to invoke surge plans at the earliest possible point.
Understanding current capacity and mobilising extra surge capacity to where it is needed.
Communicating with our clients in advance of and during the surge.
Putting MI reporting in place for clients as set out in contracts.
Communicating well with customers.
Supporting our staff during periods of prolonged pressure.
Post surge reviews to identify lessons learned.

We use surge categorisations to classify the scale of any surge event which drive the responses from each area of the business based upon the severity of the surge event.

The decision to move from Business As Usual (BAU) to surge status is based on several factors:

Current work in progress (WIP), including a WIP rising over a period prior to a surge event.
Level of incoming claims compared to BAU for the time of year.
Level of incoming telephone calls compared to BAU for the time of year.
Weather data, including short term weather warnings.
Available resources within the networks.
Available resources within MA Group.

Our surge management plan outlines the processes and actions required to take full control of surge situations by maximising capacity and maintaining customer service and service level agreements within specified levels.

Our detailed surge plan is available upon request. The plan sets out the different categories of surge and how we deal with them. Practical steps set out in the plan include:

looking at staffing levels and immediately planning extra shifts and overtime,
reallocating staff members from non-affected teams to assist with the increased workload,
setting up daily update meetings with clients to discuss WIP status, volumes and service levels,
notifying suppliers in surrounding areas of the potential volume increase in affected areas so they are ready to travel,
engaging with clients’ other suppliers to ensure good communication and co-ordination,
engaging MA Assist contractors to provide additional capacity for surveying and drying,
ensuring surplus Revival owned equipment is ready and that agreements with manufacturers to provide agreed ring-fenced additional units are activated, and
using our digital technology to predict lead times and dry dates and set expectations.

We use a flexible, hybrid employment model for MA Group staff with excess capacity built into it, enabling us to create extra capacity when needed through overtime and a focus on “must have” activities that progress the claims. We also have agreements with recruitment agencies who can supply us with temporary staff at very short notice.

Because we have three supply chains that are affected by surges at different times and in different ways we can use resources in those supply chains flexibly. For example, MA Assist contractors are usually not impacted by surges for several weeks, so they can provide extra capacity by using their employed surveyors to support Virtus and their own drying equipment to support Revival on smaller, simpler restoration claims.

Our integrated IT systems also help us during a surge. Our mobile surveying and validation app, Scoper, allows surveyors and technicians to collect data and photographs from site, prepare schedules of works and scopes and create tasks for office staff that can all be transmitted from site directly into our claims management systems, Pulse. Virtus surveyors also use Scoper to agree cash settlements with customers immediately when on site, which keeps claim durations and costs to a minimum. This makes Revival and Virtus incredibly efficient, reducing downtime and administration for technicians allowing them more time on site helping customers. Also, we are integrated with our clients’ systems so they have immediate and automatic updates on claims from Pulse, enabling them to update customers and have a clear view of a claim’s progress.

The key to managing surge well is understanding current and available capacity. We are experts in this as we explain below.

Understanding available capacity

At any given time, we know exactly how much WIP we have in terms of volume and value and how much is due to complete over the coming months. But more importantly, we also know exactly how much more work we can deal with – by supplier, postcode, equipment availability and type of work – so we can easily communicate with clients in times of surge to give them up to date and accurate information about remaining capacity and expected lead times. This applies to all of our supply chains, whether it’s surveying, restoration or reinstatement. This helps us and our clients manage customer expectations and reduce complaints caused by delays and communication.

MA Group has developed a capacity management system called Know Your Limits (KYL). This system cleverly combines data on volume, value and supplier performance to create a clear picture of the available capacity by supplier, postcode, region and nationally.

The capacity we assign to each of our suppliers is based on the value and volume of work they have closed and invoiced over a prescribed period as well as the work they are planning to start and complete in the coming months. The idea is simple – the more a supplier can evidence that they are prioritising our work and moving it through to completion, the more work we will give them.

We’ve also designed a way of looking at what’s coming through the pipeline for our suppliers so we can ensure that they have a steady stream of work and cashflow. We look at their start date lead times to understand how much more work they can take on.

All of this is overlaid with performance metrics and work is assigned to suppliers by our Pulse software, based on the results of KYL and the performance metrics. So, there is no favouritism or bias in the way we assign work – it always goes to the supplier in the best position to deliver a great service.

All this data is shared with our suppliers regularly so they can see how their daily activities impact their available capacity, how long they take to start work and what they’re planning to complete.

Our clients have a view of this too so that they can help their claim handlers to manage customer expectations from FNOL.

The MA Group capacity strategy allows for a contingency in most postcodes in the UK and NI. This allows for fluctuations in demand of up to an extra 30% – 50% (depending on the network) in any postcode. By understanding volume by region, we can always accept a certain amount of unknown or unexpected volumes of work.

Our capacity management also applies to Revival’s drying equipment – we always know, in real time, how much equipment is available to use by type of equipment, region, postcode and branch.

All our branches log equipment onto and off site using a QR code system that is integrated into our claims management software, Pulse. When this is used in conjunction with TREVOR, our digital solution that predicts dry dates and monitors the performance of drying regimes, this is an incredibly powerful tool for managing capacity in Revival.

Thanks to TREVOR, we can also predict how much equipment will be available over the next few weeks. Because TREVOR predicts dry dates on each claim, we know when each piece of equipment will be available for another claim. This helps us to plan and manage capacity as well as monitor it.

There is plenty of excess capacity for our drying equipment. During BAU we have so much equipment held by the branches that we normally have over 80% available to use. This, along with our agreed ring-fenced equipment available from manufacturers, ensures we can deal with unpredictably high volumes at short notice.

We also have a clear view of the WIP for all networks, so we can manage resources and focus them in the right areas.

The map above shows a snapshot of Virtus’s WIP during Storm Arwen in 2021. By having a clear view of the location of all our claims we can distribute surveying resource across the country where it’s needed.

We also understand the capacity available in our Virtus network thanks to Know Your Limits for the surveying network.

During the burst pipe surge over Christmas 2022 we saw a spike in claim volumes in December and January. Our Revival branches and Virtus surveyors were very busy straight away, but the MA Assist building contractors only really saw the impact from March/April when scopes were getting authorised by clients. Because we can monitor and manage capacity across all our supply chains, we were able to move resource around and deliver the outcomes that our clients and their customers wanted.

To find out more about how we manage capacity please read our opinion piece Managing the ultimate competitive weapon.

Accessing extra capacity

During a surge we know we can get a certain amount of extra capacity out of our supply chains quite easily. We include a buffer in our capacity model and ensure that there is at least 30% – 50% extra capacity (labour and equipment) available across our networks in BAU – i.e. there is enough equipment and labour in each region so we can increase volumes quickly by 30% – 50% (depending on the supply chain) without damaging performance. We know from experience that this is the case. For example, we have analysed historic and current performance on three key performance metrics to demonstrate Revival’s service delivery during BAU and surge for claims from January 2023 to June 2024:

Initial visits

We can demonstrate that our performance on the time taken for the initial visit is not affected by volumes. If anything, the data shows that when there is more claim volume going into Revival, the time taken to do initial visits reduces. This is because the scheduling of appointments in BAU is maintained to keep technicians busy and doesn’t reduce in times of lower volumes – the branches have a “use it or lose it” mentality and know they need to keep their labour for busier months.

Surveys

Over the same period a similar phenomenon to initial visits happens with surveys, but the performance is improving thanks to the roll out of Scoper v3, specifically designed to increase on-site efficiencies and make recording and scoping work easier for the technicians.

Works completed

Revival consistently hit its works completed targets from January 2023 to June 2024, regardless of volumes. They are getting even better thanks to TREVOR and the improvements being demonstrated in our ability to accurately predict dry dates combined with the ability to capture and use start date lead times from the MA Assist BRN, we are proactively reducing the dead time and handoffs between commodities to improve the customer journey.

Regional surge

When a surge hits in a region, we can increase capacity in our existing networks using existing resources by at least 200% for a few weeks by using the following techniques:

using over-lapping territories (multiple suppliers in each region) and a clear understanding of the capacity available for each supplier,
bringing supplier resource in from other regions,
using all the drying equipment held by Revival branches (80%+ of it is usually available in BAU),
for Revival our live data allows us to see where equipment has been deployed and identify any areas that have an excess that we can move to affected areas,
using our predictive technology to understand lead times and the capacity becoming available over the next few days and weeks,
for Virtus claims, automation and desktop solutions enable us to push through 300% more claims to surveyors than BAU quite comfortably,
making sure that communication with customers is timely and accurate so their expectations are managed and complaints are minimised – customers don’t mind waiting when they have an agreed date for a survey or initial visit,
incentivising suppliers to prioritise our work by offering better rates to those experiencing 140% of BAU volumes, and

paying extra for suppliers working out of area.

Nationwide surge

Where a severe nationwide surge event takes place (which generally means that volumes are running at over 220% for Revival and 300% for a storm event for Virtus across the UK) we can employ the following strategies in addition to the above:

Revival can leverage the strategic relationships already in place with Edge, Corroventa, Ecor Pro and Dantherm to ensure UK wide equipment availability. We have agreed, ring-fenced equipment available and in previous surges these suppliers were able to deliver extra equipment within 24 hours of ordering.
The Revival branches can employ vetted, temporary staff locally, increasing the capacity of their labour by 40%.
We can use MA Assist contractors to carry out surveys and validations as well as smaller drying jobs for Revival, to add a further 25% to capacity.
Virtus surveyors work overtime and will travel around the country. We pay surveyors more during surge so they prioritise MA Group work, and we spend a lot of time developing strong relationships with our surveyors to make sure they feel appreciated and so want to help. Usually, surveyor’s diaries fill up in the order they receive allocated works, so the key is to get in quick and buy up capacity even before the higher volumes start coming in.
We happily work with the competition, i.e. fellow suppliers on our clients’ panels, to work smartly together as one and co-ordinate the allocation of claims.
Managing customer expectations is all part of creating extra capacity, especially for Virtus – customers know things will take longer than normal and are happy to wait if we communicate well with them and ensure they have agreed dates for initial visits or surveys

Nationwide Revival capacity builds up as follows:

Nationwide Virtus capacity builds up as follows:

MA Group staff

Our control centre performance is monitored on a continuous basis, and we use a flexible, hybrid employment model that has a level of excess capacity built into it. This allows us to adjust shift patterns and move resource within the control centre based upon demand (e.g. moving internal resource from managing claims for MA Assist, where the surge hits later, to managing claims for Revival and Virtus). We also refocus staff from the “nice to have” activities, such as chasing clients and third parties for updates, to “must do” activities that actively progress the claim. This is usually more than sufficient to resolve short term issues and avoid any bottlenecks.

For a more prolonged period of surge we will increase overtime, cancel leave and bring in temporary administrative staff to carry out tasks that are not customer facing. We also use home working so staff can work extra hours from home around their other commitments and avoid unnecessary travel during bad weather. We also have agreements with recruitment agencies who can provide us with temporary staff at very short notice.

Our staff are also trained to triage claims – claims are assessed and prioritised according to the nature of the individual incident and the customers circumstances or vulnerability.

Communicating with clients

Good communication and collaboration between all parties is incredibly important in surge. MA Group is structured to ensure that our clients are very well represented within the business via the account management team, a team with a lot of experience in communicating with clients during surge. The Account Manager is effectively an extension of the clients’ teams.

Our surge categorisations set out the internal processes and schedules for surge WIP management meetings and the key staff members who are required to attend them. These meetings are held to ensure that everyone knows all the information about available capacity in each postcode and where more capacity is needed, and at these meetings decisions are made about allocation of internal resources and suppliers to areas where they are needed. This ensures that we don’t follow a panicked, scattergun approach and that resources can be effectively allocated to parcels of work in each region.

These meetings make full use of the real-time data that we hold. Information available in capacity updates can be provided at a national, regional, postcode and supplier level and include the number of technicians or surveyors available, the amount and types of equipment available, geographic hotspots, real time visit dates and claim stage summary.

Account managers attend these meetings so they can update clients on the status of the surge WIP and collaborate with clients on how best to manage the current and incoming WIP. This is a two-way dialogue where the client can get reassurance on how the WIP is being managed and we can get good information on the incoming demand so we can plan and co-ordinate resources effectively. We also provide clients with real-time access to our Pulse claims management system, and it is integrated with Corelogic and other client systems to promote transparency of capacity and service performance.

Our strong data analysis ensures that we have a clear view of available capacity and can see if we are likely to exceed it at any point soon. If it does look like we are going to exceed all our available capacity we can inform clients in advance so they can put alternative plans in place, like additional desktop surveying resource, higher cash settlement limits and using other suppliers.

A good supply chain can adapt to changing volumes but will never be able to create enough capacity to keep service levels at BAU levels during an extreme surge. Claim durations will increase and customers expect that to happen. It is important to remember that cost and quality should be maintained, but sometimes the time element will slip – i.e. there will be delays when compared to BAU. Agreeing surge conditions and surge SLAs is key to a good working relationship, but it also means that everyone understands the lead times and can communicate with customers to manage their expectations and reduce the risk of complaints.

Communicating with customers

Consistent and clear communications with customers from the supply chain and the insurer are key to keeping customers satisfied. This is why good communication between supply chains and insurers are so important – if a supplier is saying one thing and the insurer another, customers become frustrated with the uncertainty and confusion.

In our experience customers are happy if they receive clear communications and have certainty around lead times, even if they have to wait a few days. It’s uncertainty and lack of communication that creates complaints in surge.

At MA Group we are very good at predicting lead times for our suppliers and we use TREVOR to predict dry dates. By sharing this information with customers, we can manage expectations and deliver certainty around when things will happen. Being able to accurately predict when things will happen also helps us schedule in the next supplier before the previous one has finished, which reduces claim durations and stress for the customer.

During storms Arwen and Eunice in 2021/22 Virtus maintained customer NPS in the high 80s because we communicated well, stuck to agreed dates and our surveyors delivered clear decisions on site. These high levels of customer satisfaction were not impacted by repudiation levels – as long as the communication was clear and the reasons for repudiation were clearly explained.

Virtus makes use of high levels of automation which means that within minutes of Virtus receiving the claim the customers are notified, the surveyor is allocated, and a visit date is agreed within 24 hours.

Revival excelled during the December 2022 freeze where volumes doubled over a two-week period. Our over-lapping territories and ability to access extra capacity quickly from other regions and meant that we delivered exceptionally well against our clients’ service level agreements and maintained high levels of customer satisfaction (NPS 79) and low complaints (0.58% of incoming claims).

Supporting staff

During surge the volume of incoming claims peaks and falls within a couple of weeks, but it is important to remember that the surge is in place for suppliers for much longer as they deal with the higher levels of WIP often over a period of months. So, it is important to ensure that MA Group staff and suppliers’ staff don’t “burn out”.

We monitor capacity and minimise the risk of overloading suppliers and their staff as much as possible. We use a range of analytics to understand daily capacity and to address any points of concern in relation to our own staff. We provide staff meals as well as treats and healthy snacks to keep energy levels high. We use home-working so staff can work extra hours at evenings and weekends around their other commitments. We also have an Employee Assistance Programme for all staff who may need help and support at any difficult time, not just through surge.

Post surge review

After every surge event we analyse our performance by looking at the data and getting feedback from our clients. We then use the learnings to change processes and make improvements ready for the next surge – representatives from each function in the group come together to set out an action plan and then oversee its implementation.

We provide a report to clients setting out how we performed, what changes we are making, and we provide feedback to the client on things they can also do to help us deliver for them in the next surge.

Storms Arwen and Eunice 2021/22 – Virtus

From November 2021 to February 2022 the UK experienced an unprecedented set of five named storms in four months. Storm Arwen first hit the UK on 26^th November 2021 and was followed quickly by Storm Barra in December 2021 and Storm Corrie in January 2022. Then Storm Eunice arrived, the biggest of them all, on 18^th February 2022 which saw a record-breaking wind gust speed of 122 mph at The Needles on the Isle of Wight. This was quickly followed by Storm Franklin just two days later.

Storm Arwen and Eunice were the biggest of the five storms but were quite different – Arwen mainly affected the Northeast of England and Scotland whereas Eunice was more widespread and affected most of England and Wales. These storms created an extreme surge event for Virtus as incoming volumes were 400%+ of BAU for a week for each storm.

Storm Arwen (left) had a greater concentration of claims in the Northeast of the UK, in particular the NE postcode which had 22% of claims. We also had quite a few claims in remote areas of Scotland, areas which are always challenging even in BAU.

Storm Eunice’s heat map (right) showed a very different pattern of claims with far more areas of the UK affected and the highest concentrations in the Southwest and Southeast of the country. We also had a few hotspots in the Northwest of England. As these were all heavily populated areas, insurers and intermediaries were competing for surveying and validation resources.

Despite the challenges faced during a surge, NPS remained high for Virtus and the surveyors. We found that most customers were very understanding during the surge, accepting there was going to be a backlog for arranging surveys. As long as we communicated with the customer and booked in a date, they were generally happy. Our complaint ratio remained under 1% of claims received.

NPS scores and complaint ratios were not affected by repudiation rates or savings made and remained at over 90 for both storms. This demonstrates that our surveyors were able to deliver bad news empathetically and explain why they have made the decisions to ensure that the customer understood. Where complaints did arise, they were down to communication issues – either MA Group or the surveyor had not kept them informed, especially around survey dates.

Outcomes were fairly consistent across the two storms in terms of repudiations, cash settlements etc., but claims going to BRN increased significantly during Storm Eunice as more customers opted for help with repairing their homes after discovering that several named storms had made getting a builder and scaffolding company to carry out works more difficult to arrange privately.

December 2022 freeze – Revival

In December 2022 there was a prolonged period of extremely cold weather and snowfall. Temperatures reached a minimum of minus 17.3 degrees in Braemer, Aberdeenshire, Scotland on 13^th December. Revival’s volumes were 223% of BAU over a two-week period.

This was a level 3 major surge, where 65% of claims were received within the first 5 days. The surge was experienced all over the UK and took place shortly after MA Group acquired Chem-Dry UK, so the new branches did not have access to MA Group’s digital solutions and integrated systems.

Despite this, Revival’s performance was recognised by clients as market leading, and with the new technology we now have in place (TREVOR, Scoper and equipment management) the results will be even more impressive in the next surge.

Revival delivered the following results:

85% of customers were contacted within one day (1.62 days on average)
89% of initial visits took place with four days of the customer being contacted (4.2 days on average)
94% of works were completed within 25 days (20 days on average)
NPS was 79

Complaints were 0.58% of incoming claims volumes.

Want to know more?

As winter approaches and the number of extreme weather events increases, the industry is focussing on surge strategies more than it ever has. We can demonstrate our surge capabilities with facts and data, and we would be happy to talk to any insurer, loss adjuster or intermediary about our surge capabilities and how we can help their customers in their hour of need.