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STORM TROUPERS

Members of FM Global's catastrophe team help clients protect their facilities in the face of natural and other large-scale disasters

Ike was the third-most-destructive hurricane ever to make landfall in the United States, after Katrina in 2005 and Andrew in 1992. The third major hurricane of the 2008 Atlantic hurricane season, Ike began as a tropical disturbance off the coast of Africa in late August. By Sept. 1 it became a tropical storm west of the Cape Verde Islands, and by Sept. 5 it was a Category 4 hurricane with maximum sustained winds of 145 mph (230 km/h).

When reports of a potential Category 4 storm rolling into the southeastern United States first surfaced late last August, members of an FM Global catastrophe (or "cat") team in the area knew they were in for a long night, week and month. Engineering cat team coordinators Roger Housel, field engineering group manager, Dallas operations, and Mark Engelson, AVP, field engineering group manager, Dallas operations, rushed to the phones to start the vital but time-consuming duty of canvassing clients in the potential strike zone, a tract some 900 miles (1,448 kilometers) wide. Armed with a list of suggestions for actions to take between the time of the phone call and the projected arrival of the storm to safeguard clients' facilities, the men stressed the urgency of these actions—even for clients with strong loss prevention programs and existing catastrophe plans. The claims side of the cat team, meanwhile, was in the process of assembling its adjusters and office staff as well as procuring hotel rooms in various locations in the event that the storm was widespread.

"FM Global's catastrophe response is extensive and unique," Housel explained. "Most companies send out adjusters after the event occurs, which we, of course, also do. But, FM Global does a lot of legwork well before the storm actually hits, canvassing clients in areas potentially at risk, and then getting engineers on site as soon as possible after the event."

With a close eye on the weather charts, the cat team on the ground—which is supported by experts from across the company in the areas of claims, engineering, underwriting, information technology and research—geared up for a potentially lengthy event. "We watched the storm's progress closely because we knew it would affect a lot of our clients," Housel said. The number of facilities to report a loss would eventually top one thousand.

" Most companies send out adjusters after the event occurs—which we do. But FM Global does a lot of legwork well before the storm actually hits, canvassing clients in areas potentially at risk."
—Roger Housel, field engineering group manager, FM Global

The cat team gears up

With a disaster of this magnitude, the company's cat team members must respond quickly and with purpose. In the case of Ike, they swung into action, closely following protocol set forth in the company's 84-page catastrophe response manual, which is updated and refined annually.

"When a hurricane, flood or other large-scale catastrophe first presents itself, our engineering cat team calls all clients in areas expected to be affected by the event to make them aware of the loss prevention implications and to send along helpful checklists suggesting immediate actions they can take to safeguard their facilities," Housel explained. "Though many companies have their own catastrophe plans in place, they still appreciate our checklists. For others who rely solely on FM Global for catastrophe planning, our pre-event calls and checklists are central to loss mitigation."

Of course, the ability for clients to carry out any loss prevention activities depends on whether they still have employees at a given facility. "We have to make these canvassing calls well in advance, when the storm first appears to be a threat," Housel continued. "If we wait too long, the workforce at that client location may be evacuated, in which case there will be nobody on site to complete the tasks."

Before clients have been canvassed, the cat team's field engineering staff monitors the event through a variety of trusted information and news sources. With this reliable information, the team narrows down the list of clients expected to be hit hardest. After the hurricane, flood or other catastrophe occurs, the cat team immediately calls everyone on the client contact list by cell phone (landlines are usually knocked out during large-scale weather disasters) to find out precisely what happened and to determine, at least preliminarily, the scope of the damage.

Command central

At the same time, FM Global field engineers who live in the areas experiencing the catastrophe are already checking in on client facilities. These engineers, experts in property loss prevention, relay basic information to the local field office regarding the condition of the facilities they've seen: Has the roof sustained damage? Is the building secure? (FM Global has cat team members based in field offices around the world, including those in Dallas, Atlanta and Cleveland.)

To handle the logistics of disaster recovery, the cat team members responding to the event establish a remote command center. "We try to locate as close to, but generally not within, the affected area," Engelson said. "It is from here that our engineers, joined by claims adjusters, IT experts and others pivotal to the team, coordinate efforts to stabilize the loss."

In the case of Hurricane Ike, the cat team engineers and adjusters established a command center in Houston, Texas, located about 25 miles (40 km) west of Baytown and 40 miles (64 km) to the north and west of the hardest-hit areas. In addition, claims adjusters established a satellite office in Beaumont, Texas, to reduce the drive time to and from loss sites, and therefore allow them to better serve clients. Within two to three days of Ike's making landfall, the engineering team had visited between 400 and 500 client sites. Gaining access to Galveston Island was particularly challenging. "There is only one road into and out of Galveston, and immediate access was prohibited to everyone except medical first-responders and FEMA [Federal Emergency Management Agency]," Housel said. Fortunately, a lesson learned during Katrina helped the Ike team gain access within a few days.

In responding to Katrina in 2005, the team discovered that without appropriate credentials and permits, visits to damaged client sites were impossible; FEMA had restricted access to affected areas. "We were prepared with Ike," Housel said. "When the storm struck, we already had our permits in order. Although we had to wait a little longer than we'd have liked, we were allowed in within five days."

Mitigating post-event loss

For companies with locations in the area, getting back in business quickly following Ike was paramount. Unfortunately, this rush brings with it great potential for additional loss—perhaps greater than that caused by the initial event itself. "We've seen cases where facilities that were only minimally damaged in a catastrophe were ultimately devastated because workers, in their haste to clean up, overlooked or misapplied key safety procedures," Housel said. "In these types of cases there is the very real possibility of burning down an entire facility."

To avoid such a scenario and ensure losses don't escalate after the storm has passed, FM Global's cat engineers visit every single client facility affected by the event, starting with the largest or hardest hit. The first order of business is to ensure adequate fire protection and to stress adherence to safe hot work procedures. Other tasks include protecting products or supplies housed at the site, minimizing mold growth and salvaging equipment.

"A few simple actions can go a long way toward preventing future loss," Housel said. "For example, when responding to Ike we made a concerted effort to open up many affected buildings in order to stop, or at least slow, the growth of mold. If these buildings had remained sealed for weeks—even days— the potential for loss due to the rampant spread of mold, in some cases, might have exceeded the initial storm-inflicted damage."

According to Gerry Alonso, senior vice president, claims, what distinguishes FM Global's catastrophe response is the ability to follow through. "We establish a catastrophe command center in the affected area with a team of FM Global adjusters and engineers immediately after the event, which enables us to provide an immediate response to our clients," he said. "The catastrophe team remains in the affected area until all losses are visited and stabilized."

Once the command center is notified of a loss, the cat team's claims members begin the complex task of stabilizing the loss site, which often involves calling in experts in building, equipment or salvage. They also begin the process of adjusting the claim and, just as important, mitigating the loss itself. "We want our clients to be back in operation as soon as possible," said Jeffrey Elizeus, senior general adjuster and catastrophe coordinator, Cleveland operations. In the case of Ike, more than 1,200 losses were called in within a few days of landfall, which presented an enormous task for the claims team. "For Ike, we brought with us 40 dedicated cat claims adjusters from throughout FM Global, and operated a remote, full-service cat claims office for 26 days," said Elizeus.

FM Global was able to deliver this level of service because of the extensive pre-planning the claims cat team does before any predicted event. "First we book flights at area airports, and make new reservations or alternate arrangements— such as reserving rental cars—in the event the closest airports are shut down prior to our departure," Elizeus explained. "Even more important to our ability to get on site quickly is securing a large number of hotel rooms in areas as close to, but not paralyzed by, the catastrophe. During Ike, as during Katrina, we made extra reservations in areas potentially near the storm's path. That way, we could ensure that our personnel would be reasonably close to the work sites."

Added Housel, "Through experience we've also amassed a long list of items to bring with us. Common items include sleeping bags, food, water and flashlights. Some less obvious items include bug spray and Fix-A-Flat®—during Katrina there were no facilities open to fix a string of flat tires caused by road debris. Our experience with past disasters has made us much more cognizant of what's needed to operate remotely without the usual comforts of home. Today, we're well prepared to actually live and work on site for a significant period."

NOT HALF BAD Immediately following Hurricane Ike, FM Global’s catastrophe team began visiting client facilities in the area, starting with those hardest hit. This 70-plus-story building had many of the windows of its lower stories blown out. Interestingly, the windows above the 40th floor remained virtually intact.

Packing up

Once engineering and claims have visited every site and the loss-adjustment process has been started on every claim, the cat team packs up and heads for home. Yet there is still work to be done. While claims handles the administrative end of adjusting thousands of losses, the engineering team gets to work determining why certain losses occurred in the first place. "For FM Global's largest clients or those who suffered the greatest catastrophe-related losses, the engineering team launches a detailed investigation into the root causes of the loss," Housel said. "We want to understand exactly what led to this loss and develop recommendations for minimizing the potential for a similar loss in the future. To do so, we work in concert with our affected clients to pinpoint precisely what went wrong."

He added, "Once we know the hows and whys of a major loss, we tap our vast store of research, along with decades' worth of on-the-ground experience, to devise a compelling loss prevention solution. This way, when the next disaster strikes, our clients will be even better prepared to withstand the impact."

HEAVY WATER In the days after Ike hit, FM Global’s cat team helped mitigate damage at client facilities such as this one. The roof collapse here was the result of ponding water that occurred when roof drains became clogged with debris.

This story originally appeared in the #1/2009 issue of FM Global's [reason] magazine. www.fmglobal.com/reason

©2009 FM Global.
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