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5 claims lessons from the COVID-19 pandemic

When the COVID-19 public health crisis began its sweep across the globe in March, stay-at-home-orders expanded across the U.S., triggering a dramatic increase in remote work that left the economy reeling. By May, nearly one-third of Americans worked from home, including many in the insurance industry. There was a sharp decrease in claims volume—particularly in the auto line of business when many individuals stopped driving to shelter in place.

Today, we can examine insurance trends that are likely to continue post-COVID-19. Here are some key takeaways for insurers as a new chapter unfolds across the industry.


Remote claims processing is here to stay

Before the pandemic, trends in remote claims processing were already gaining momentum. For example, of customers submitted vehicle damage photos to insurers for claims processing in 2018, and photo-based claims estimates increased tenfold in recent years.

Still, virtual claim processing wasn't generally perceived as prevalent throughout the industry yet, and some insurers had the transition further down their roadmap. But with most claims staff now working remotely during the pandemic, many insurers have made a swift transition to remote processing. With potential benefits such as lower costs related to in-person loss inspections, improved customer experience, and expedited claims processing, we fully expect this trend to remain.

Economic crisis, increasing fraud

Historically, economic instability and downturns often resulted in increased fraud activity—which proved to be true in 2009 during the Great Recession.

When the pandemic struck in March, suspicious claims rose by roughly 12 percent, and claims linked to suspicious medical providers increased by 14 percent. As unemployment remains high, opportunistic fraud will likely continue to grow.

Ironically, another COVID-19 claims trend will likely lead to more fraud as well—remote claims processing. Fewer in-person inspections can open the door for fraudsters to use pre-existing loss photos or fake images to collect illegitimate payouts. Reducing fraud risk in photo estimates and establishing a strong perimeter defense are critical to combat this trend.

The changing workers' comp landscape

COVID-19 workers' comp claims can be complex—especially when it comes to managing treatment, return-to-work timelines, and duration of the claim. Even if the country successfully flattens the curve soon, these types of claims will likely continue and have an upward influence on claims costs.

Adding to those challenges are two dynamics: telemedicine and remote work. Telemedicine consultations have surged during the pandemic and may become more common going forward. Adjusters must adapt to evaluating those types of treatments and improve oversight of those claims. If claims handlers continue to work remotely, they face challenges of getting the right resources involved with a claim quickly to contain costs.

A new perspective of catastrophe claims management

The combination of a public health crisis and an extremely active hurricane season is fertile ground for re-imagining how the industry handles catastrophe events. It's easy to see why aerial imagery, geospatial data, and remote sensing technology can be valuable tools for damage assessment and catastrophe response.

Rather than sending and adjuster into the field to assess catastrophic damage, remote snapshots can provide fast and reliable information, virtually eliminating any in-person risk. As the pandemic continues, we expect carriers use this technology as we move into the heart of Atlantic hurricane season.

Likewise, tools such as weather analytics and geospatial location data can help carriers determine which policyholders were likely affected by an event and confirm the date of loss. And remote sensing can improve loss response times by communicating post-loss conditions directly to the adjuster.

Faster transition to digital claims

In recent years, many insurers have been making a gradual shift to digital claims processes, leveraging technologies like predictive analytics, AI, and automation. But the COVID-19 pandemic is likely to accelerate the move to digital. It's almost too soon to predict the longer-term impacts that the pandemic will have across the insurance industry—but one thing is sure, change has come, and it is likely here to stay.

Crisis births new opportunities

The current crisis has been the catalyst for change the industry has been talking about for some time. Though COVID-19 has created some challenges, most carriers have pivoted quickly to serve customers and maintain operations in the new environment.

Insurers now have the opportunity to keep the momentum going. Without a doubt, we've entered a new norm and there is no turning back. Those who ride the wave of change and innovation are more likely to emerge as leaders in this new decade.

Carlos Martins

Carlos Martins is senior vice president of ISO Claims Solutions at Verisk. You can contact him at

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