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Using Data to Your Advantage

 

Editor’s note: This feature originally appeared in the October issue of DS News

Jody Gunderson joined National General Lender Services as EVP in 2018. In her role, she is focused on furthering the company’s growth through industry awareness of National General’s capabilities, commitment to compliance, and custom product offerings. Gunderson also lends her experience and support to a variety of industry groups to strengthen the mortgage servicing industry.

Prior to joining National General, Gunderson supported Assurant, Inc. for over 19 years in various key leadership roles, last serving as SVP, responsible for enterprise strategic relationship management. Gunderson began her career at Bank of America where she assumed positions of increasing responsibility in banking, mortgage and insurance, including VP of Bank of America’s Insurance Agency. In addition to her over 30 years of experience in the mortgage and insurance industry, Gunderson is a multiple award-winning executive recognized by MarCom and Hermes, and in 2017 was named by HousingWire as one of the 50 most influential women in the mortgage finance industry. 

She recently sat down with DS News to discuss natural disasters, and how data can benefit both the borrower, and the lender. 

What has data taught us on how to react and prepare for natural disasters?

There is an increasing amount of information concerning disaster events that allows servicers and their insurance providers, such as National General, to be more proactive rather than constantly reactive. Historically, when we knew that a tropical storm, hurricane, or wildfire was forming, our insight into the specific areas of impact and the level of damage was broad and largely ill-defined. Today, the enhanced modeling and available data allows us to prepare precise analysis and targeted response plans by specific catastrophe type and severity. This ensures a quicker response and level of readiness when an event takes place.   

It’s crucial to have disaster response plans that advance the overall borrower experience. National General’s enhanced catastrophe data modeling enables us to proactively prepare for large events and avoid impact to normal work volumes. This benefits impacted borrowers who need to initiate claims or manage their loss drafts, as well as borrowers that are miles away who contact us about routine insurance inquiries. The nationwide borrower experience should remain consistent regardless of an event.

Additionally, data continues to teach us lessons. Experts on the panel [“Disaster Data: What It Shows and Why Change is Needed”] highlight that insurance industry loss data currently indicates many properties are underinsured, thus lacking sufficient coverage to fully rebuild. From this data, our panel recommends the need to recalculate insurance replacement cost more frequently so that customers are more fully protected. This analysis and recommendation will help avoid pitfalls in the future.

How has the evolution of technology impacted our ability to track, react, and prepare for storms?

Both the insurance and mortgage industries have more information than ever to identify specific impacts in areas where natural disasters are forecasted to strike. Meteorological forecasts have become more accurate and are able to discern potential events, especially hurricanes, further in advance. We also have better information about potential flooding and wildfire events. This enhanced data and more precise modeling translates into better analytics and thus a better borrower experience.

For modeling, National General utilizes a variety of meteorological services, combined with advanced geocoded modeling software, to develop information about a catastrophe's potential impact on a loan portfolio. For instance, when a hurricane landfall is imminent, we feed property data into our catastrophe analysis software to generate servicer-specific exposure reports. Further, we provide county/ZIP code lists and maps for each catastrophe where FEMA announces federal declarations for individual disaster assistance. We also provide our data to clients for their use in proprietary models. 

It’s also critical to quickly adapt and respond to advance the customer experience as well as satisfy regulatory matters. It’s possible now to get out in front of an event both from a borrower prospective as well as operationally. Proactive communications and education can be delivered to inform or reinforce the customer’s knowledge on what to do in the event of a loss. Also, the servicer and its insurance partner have the lead time to ramp up staffing and refresh catastrophe training. They can also implement operational changes such as accelerated tracking to ensure renewals are paid in advance.

For regulatory matters, such as the GSEs changing Loss Draft disbursement thresholds, it’s imperative that servicers and their insurance providers quickly make the update and get needed funds into the customer’s hands. At National General, we use our technology to make on-the-spot updates to business rules that quickly implement process changes.

It’s also important to anticipate future activities. When notified of a loss, NatGen creates an electronic file in our Loss Drafts Platform, even before the claims documents are received, in an effort to expedite processing. When the documents are complete, they are available for view by customers or clients via our secure web portal. This proactive process and web-based technology allow us to accelerate the process to restore the borrower’s loss while additionally providing a more cost effective approach to our clients, a win-win.

How have the GSE's servicer obligations changed through the years?

Servicers continue to be held to increasing levels of accountability by the GSEs. Specifically, they are required to maintain higher levels of vendor oversight, as servicers are held accountable for their actions of their service providers. 

The increasing capacity of technology allows National General to make the necessary updates to quickly update business rules to meet the ever-changing requirements of the GSEs and private investors. We also partner closely with our clients’ vendor management teams and provide transparent reporting that is required for their GSE and other regulatory audits. 

Aside from using data, what more can servicers do to help the borrowers during a time of crisis?

Servicers and their insurance providers should be focused on the borrower’s experience during a crisis situation. Training call center staff to handle calls with empathy, with a focus on first-call resolution and taking the time needed to resolve the issue, ensures the borrower knows they are valued as a person beyond the business relationship. Beyond the Golden Rule, a focus on the human element creates true brand loyalty that benefits both the borrower and the servicer. 

This borrower-centric focus is especially important following a catastrophe. Borrowers are often displaced while dealing with complex personal and financial issues. This leads to stress, especially when dealing with a mortgage or insurance. A focus on simplifying and easing the borrower’s use of products and services in providing and obtaining required information is very important. This may require that communications methods be altered. Additionally, borrowers should have access to mobile-friendly tools as all of us increasingly use our smartphones to manage our lives. These tools should be intuitive and make the process as smooth and efficient as possible since the borrower’s ability to comply with insurance requirements may be challenged.

How are lenders utilizing data to help borrowers?

Catastrophe data and analysis enables lenders to apply unique processing rules for borrowers in impacted areas leading up to and following a catastrophe event, such as providing targeted communications, waiving late fees in specific geographies, etc. Lenders can also activate assistance channels in their branches or service centers in the impacted areas, so that borrowers can obtain in-person assistance in their community or near evacuation points. 

Data also allows servicers and their insurance providers to analyze past events to help determine how certain tranches of borrowers will react to a loss and what their needs will be. For instance, borrowers with high value properties have different needs than those with starter homes. By pattern analysis, custom business rules and call scripts can be developed that best address the needs of each situation.

What are the biggest missteps companies make when relying on data to react and prepare for a natural disaster?

The human element can often be overlooked when preparing for a natural disaster response. This happens inadvertently because of the level of additional effort necessary to respond to an event coupled with the need to maintain consistent business rules. It’s important to employ measures to evince care and concern. One way is to empower staff to go beyond expressing empathy, but also to take the time to truly listen. Often having someone to talk to for even a minute or two can take away a lot of stress, as well as build rapport. There should also be provisions in the response plan to allow for reasonable accommodations within the established business rules. One way to accomplish this is to offer a choice of potential solutions. The ability to make choices empowers a borrower at a time when they feel many things in their life are completely out of their control. The human element is powerful as it is how we connect and how we build loyalty. It should never be discounted and should always put any data into perspective.

Why are events such the Disaster Preparedness Symposium important for industry professionals?

A forum of industry experts and peers provides a great venue to learn new information and share best practices. The ability to hear from multiple experts collectively expands our perspective and challenges our status quo thinking. Five Star’s symposium focusing on the topic of disaster preparedness is incredibly timely and important. This helps increase the industry’s collective knowledge so that we all are more prepared to face future catastrophic events and stand ready to assist borrowers in their time of need. 

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.
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