According to hurricane reports, the 2020 Atlantic hurricane season promises a turbulent time for the residents of the USA and that leads to a huge inflow of insurance claims for IA firms. However, this year has faced some unprecedented challenges in the form of COVID-19; the deadly virus which has caused mass operational shutdown across industries.
As tropical storms become more likely, COVID-19 has been drastically changing the ways in which insurance claims are handled. From management to actual inspections, everything has had a transformation in order to streamline the entire claims management cycle. With physical distancing regulations in place by authorities, there are a lot of procedural changes that are required in order to work as a claims adjuster. New tools and practices can help claim adjusters work with these new guidelines.
The hurricane scenario:
Even in 2020, insurers are tackling claims resulting from hurricane activities that go as far back as 2017. Hurricanes Irma and Michael have formulated certain claims that are still not closed due to localization of several issues in the claims handling process in many regions in the USA. Hurricane Irma’s overall loss estimate is still in process for the last three years.
In a claims environment like this, add in the complexities that COVID-19 brings with it. As a policyholder, would one allow adjusters to come for inspection visits or to check for structural damage in their homes? Conversely, a claims adjuster would not want to risk getting infected by visiting dozens of homes and interacting with people on a daily basis. With the exponential increase in the number of cases all across the world, it is only imaginable how much people are at risk when thousands of claims adjusters have to have multiple interactions and visits across the day.
Keeping social distancing in mind, how do insurers bridge the gap between claims management and preventing the risk of infection for both adjusters and policyholders. In order to do so, newer transactional and collaborative approaches and practices need to be taken into consideration that virtualizes the entire process so as to minimize risks.
Best practices for claims handling:
Reducing in-person interactions is the focus for insurers and one of the most sought after practices in this regard is the implementation of imagery and video teleconferencing for loss inspections. The arrival of Virtual Assist as an alternative to mainstream claims adjusting is a debate that has been going on for quite some time now. Remote adjusting applications, as well as tools that incorporate policyholders into the inspection process by giving them the ability to assist with damage inspection, are on the rise.
However, with these approaches, there is a certain risk of fraud that enters the claim life cycle as the reliability of policyholder-driven data becomes questionable. In order to tackle such instances, fraud-detection analytics are also incorporated in the process which may minimize risks and help speed up the entire process. What’s important to understand is that such practices are suited for inspections that fall under daily and not large-scale claims.
Another important feature that remote work has brought forth is the involvement of drones in a post-pandemic claims-handling process. While drones might improve the automaticity of the claims inspection process, they are helpful with only a narrow range of situations. Ultimately, claims adjusting is a process that requires the human touch. There might be several areas where drones and other technological advancements can be helpful to reduce in-person interaction and minimize virus transmissions but a large number of claims would still require the presence of actual flesh-and-bones adjusters out on the field.
Determining what caused the damage and what kind of compensation a policyholder is looking at requires accuracy but the process of discovery and negotiation that happens is something where technology still falls short. Additionally, in scenarios related to personal insurance, claims adjusters would have to show up in person. In complex commercial claims, the overall engineering, and accounting complexities involved in rebuilding a property require considerable expertise.
Remote resources can help but they are not the final solution. For such cases, insurance companies can focus more on providing claims adjusters as well as other personnel appropriate protective equipment, social distancing guidelines and ensure that everyone practices certain protocols that will help prevent the risk of spreading the virus.
While experiencing a pandemic is certainly new to all of us, it is not unlikely for claims adjusters to go into a disaster-prone zone to do their jobs. COVID-19, in itself, comes out as a new form of disaster for which newer kinds of preparatory practices and precautions are required.
The practices that are currently being followed have proven to become a starting point from where claims management can strive to function again and resort to restore normalcy over a period of time.