COVID-19: What Proactive Steps Can the Insurance Industry Take?
Proactive Steps the Insurance Industry Can Take to Manage the Influx of COVID-19 Loss Claims
As the U.S. economy has shuttered due to the COVID-19 pandemic, businesses forced to close are generating a wave of business interruption insurance claims seeking to recover income lost during closure of their operations. With certain exceptions, cessation of business without physical property damage—either onsite or nearby—is not a covered loss. However, the gravity of the current circumstances has prompted several state legislatures to draft laws requiring insurers to pay these claims, even though the underlying policy premiums were neither established nor collected to cover such losses.
Roux’s Economic & Complex Analytics (ECA) practice can help insurance claims professionals navigate these complex issues and provide expertise in managing, categorizing, and isolating claims that may present covered losses. Our data management systems are designed to prioritize claims based on a tailored set of criteria, which helps insurers quickly organize claims to evaluate deficiencies and whether the claims ultimately need to be valued.
In the case of COVID-19, an extreme volume of claims may require valuation if coverage determinations are made by state or federal legislatures. Early classification and assessment of claims during a catastrophic event are crucial to allocating resources and deciding whether existing support channels provide the bandwidth and expertise necessary to process and evaluate the claims in a thorough and timely manner. A standardized, data-driven claim intake process allows carriers to identify and advance claims based on their potential for coverage. This enables insurers to isolate the clearly articulated, well-documented claims and prioritize outreach to obtain sufficient documentation from policyholders of potentially covered claims. Early implementation allows carriers to easily and continually update potential reserve requirements in an ever-changing and uncertain landscape.
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