COVID-19 Impact on Insurance Claims & Fraud Investigations

June 22, 2020

In response to the COVID-19 pandemic, the insurance and investigative industries quickly responded to stay-at-home orders, increasing unemployment and social distancing requirements. While some of the impacts have been temporary, some will last beyond the immediate threat of the virus. From the perspective of a provider of field investigative services here is what our clients have reported:

  • Insurers, third party administrators and insureds transitioned to home-based workers. This transition caused a temporary shift in focus to infrastructure and reorganizing work routines. Engagement between claims staff and investigators was reduced due to the transition to remote work
  • There continues to be confusion about stay-at-home orders, re-opening guidelines and how those impact insurance claims and fraud investigations, particularly those that require the deployment of field resources
  • Market pressures and reduced claim counts have created the need to contain costs. Non-essential employers suspended hiring and reduced staff during the stay-at-home orders. Expanded unemployment benefits offered the unemployed alternatives to filing claims as a source of income. As benefit subsidies decrease in July, the market is anticipating an increase in insurance claims as a means of creating income for those that remain unemployed
    • Despite the increase in the unemployed, essential businesses such as grocers, distribution centers, delivery companies and construction and maintenance companies have been increasing staff

Claims professionals have experienced new challenges in processing and investigating insurance claims amid the COVID-19 pandemic.

  • Some insurance administrators do not have the ability for claim professionals to record telephone calls when working remotely
  • Social distancing requirements inhibited compensability investigations requiring recorded statements from third party claimant, insured and witnesses
  • COVID-19 claim procedures, legislation, emergency regulations and case law are still developing

The above challenges have also impacted the perceived value of insurance claims and fraud investigations during our response to the pandemic. Claims professionals have expressed concerns directly impacting their antifraud and claims investigation efforts:

  • Social distancing is perceived to have negated the intelligence gathering aspect of activity checks, specifically related to injured workers activity levels
  • Stay-at-home orders and subsequent personal concerns over exposure to the virus could limit the activity levels and thus relevance of surveillance in determining the nature and extent of injured workers’ activities and level of disability
  • Medical and legal appointments were cancelled or rescheduled limiting the comparative value of evidence gathered during background investigations or surveillance

While some investigative companies chose to suspend services either due to concerns about the virus, a misunderstanding of their status as an essential business, or simply due to a lack of demand, the COVID-19 pandemic was viewed by some investigative companies as an impetus for developing, refining or educating claims professionals on alternative investigative techniques and strategies.

  • Investigators have been assisting with three-point contacts, recorded statements, and providing recording solutions to home-based claim professionals
  • Investigators have been utilizing recorded video conferencing to obtain recorded statements of third-party claimants, insureds, and witnesses. Leveraging video conferencing technology has allowed investigators to validate the identity of witnesses, develop rapport, respond to non-verbal cues, and adhere to social distancing requirements while eliminating investigative costs associated with travel
  • Recorded, video wellness checks provide comparative data such as the progression of treatment, symptoms limitations and the claimed impact of an injury on daily living activities
  • Investigative companies have been attending COVID-19 specific training related to claims and human resources issues. In collaboration with claim professionals new interview guidelines have been developed to address issues related to COVID-19 exposure, positive diagnosis, stress, and bodily injury claims related to home-based work environments
  • During the COVID-19 response, investigators have reported an increase in social media and online activity from those with open insurance claims. Desktop investigations provide much of the same intelligence as a traditional activity check or neighborhood canvass while eliminating travel related expenses and personal contact
  • Fraud and abuse continue to occur and often increases in times of crisis. Despite stay-at-home orders, surveillance investigators have observed an increase in injured worker activity, such as non-essential activities that exceed stated limitations and employment with essential businesses while collecting benefits. Some investigators have reported that subject activity levels have increased as much as 5% when compared to pre-COVID-19 statistics. Some investigative companies have suspended neighborhood canvassing operations to limit direct contact between field investigators and members of the public, shifting to gathering information via desktop or telephonic investigative efforts

Now that the county is starting to re-open, claims professionals are facing several new concerns requiring an investigative response:

  • COVID-19 industrial injury claims are starting to escalate
  • The workers compensation insurance industry is anticipating an increase in cumulative trauma claims among furloughed and laid off employees following the expiration of expanded unemployment benefits
  • Injured workers and others with bodily injury claims predating COVID-19 may extend temporary disability benefits due to furloughs and postponed treatment
  • Treating physicians may be sympathetic toward unemployed claimants and injured workers increasing the likelihood of temporary disability benefits being extended

The emerging concerns and impact of COVID-19 on insurance claims and related investigations require claim professionals to rely on investigative partners who can adapt to the new social environment, leverage technology, and mitigate costs associated with insurance claims and claim investigations.

  • Investigative providers will need to have specific expertise in addressing issues unique to cumulative trauma claims and emerging COVID-19 regulations and case law
  • Investigators will need to implement new solutions to investigate malingering and identify red flags such as remote recorded statements, enhanced desktop investigations and updated surveillance procedures
  • Evidence may need to be presented to treating physicians through remote, web-based video and evidence reviews to highlight discrepancies between claimed limitations and the nature and extent of actual claimant activity.

COVID-19 has caused a temporary and potentially a permanent shift in our industry. However, as with all times of crisis, it has also spawned renewed energy, creativity, and an invigorated entrepreneurial spirit in response to our changing environment. Insurance claim and fraud investigations remain relevant and provide value to insurance claims professionals who rely on investigators to provide them with information that allows them to make educated claims decisions.

Insurance Claims Investigations Amid COVID- 19

March 18, 2020

We know that your business does not stop even when faced with a challenge like COVID-19 and we are here to support you in whatever way necessary. The services that you have come to expect from Frasco are still available and, in some ways, being modified to accommodate the hurdles that this pandemic presents. As you continue to pursue your own business continuity efforts in the days, weeks and months ahead, we hope the following will give you some creative ideas required to accomplish your claims handling obligations despite the current environment.


  • People will be outdoors seeking exercise instead of in the gym.
  • Springtime weather will find that home improvement activities are likely to increase.
  • People will be out to get supplies, standing in lines, etc.

Social Media:

  • Social Media post volume is already increasing due to cabin-fever.
  • People are using Social Media to engage with others with less risk.
  • Social Media offers a way for people to share information about their situation and activities online.

Recorded Statements:

  • For employers who are not allowing third parties onsite, we are conducting recorded video statements and interviews.
  • Recorded electronic video statements and interviews (Click to View) allow you visibility into the claimant’s verbal and non-verbal communication.

Background Investigations:

  • Information relevant to your claim related decision making still exists and is available online.
  • Much of the background record research can be done using electronic resources despite court and government closures.

Our Commitment to You:

Amid the countless uncertainties created by COVID-19, Frasco is focused on ensuring that we remain a reliable resource for our customers to lean on. Business continuity at Frasco is currently being governed by our formal Emergency Response Plan and Executive Leadership Team members. Our advanced planning, technology, organizational structure and customer-centric values are allowing us to continue to provide service to our customers while protecting the health and safety of our employees and communities at large.

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