How Insurance Agencies Are Managing the Rise in Fraud
Running any small business during the COVID-19 pandemic is a challenge. You face a rising workload in your insurance jobs, and your employees and your clients are experiencing higher anxiety at home and at work. However, for insurance agencies, there is an additional challenge arising from clients: the rise in fraud.
The Problem of Insurance Fraud
According to Property Casualty, during the last recession, "vehicle torchings, home or business arsons, and other insurance crimes rapidly spread." Desperate people who were seeking funds did what they could to raise money, even if that meant committing fraud. Unfortunately, they also brought forward a host of consumer complaints against insurers. Some potential fraud schemes include:
Disappeared, damaged, and totaled vehicles and luxury items such as boats
Damaged areas of the home due to small fires
Medical claims that rely on fake accidents or telehealth to confirm those claims. According to VE Risk, "In 2018 alone, the FBI dismantled 207 medical fraud rings," and this is only likely to increase due to COVID.
How can your business deal with the current and future increase in fraud that tends to come with hard economic times?
Work to balance compassion for your clients with diligence about verifying claims.
Balance Compassion and Diligence
During times when people are anxious and fraud is on the rise, insurance agencies need to balance compassion and due diligence. How can agencies do both?
Staffing is key. Ensure that you have enough people to work on claims instead of pushing them through. Even if the workload is large, it's important to carefully assess each claim. Develop an emergency plan in case claims increase: plan staffing now for a potential surge in false claims.
Examine your analytics. Look at current and past trends to help your business evaluate and flag potential scams.
Develop processes for distanced investigations of claims. Today's technology makes it easy to submit fake photos, for example. How will you thoroughly examine claims to ensure that they are not fake? Turn to others in the insurance field to examine the processes that they are using to assess claims.
Work with larger organizations that are working to combat fraud. Stay informed about the resources and trends that they notice. Monitoring fraud trends will help you be more cautious when it comes to claims that resemble those trends.
Have compassion, and encourage people to stay honest. People are stressed and anxious and want to get their insurance claims resolved. At the same time, your business must do its due diligence and take your time with each claim. Train your employees to work with anxious or pushy clients, and give them the information that they need to thoroughly understand fraud trends.
Help protect your business: connect with us at the American Agents Alliance. We're here to provide you with the support you need to run an insurance agency today. Contact us for information about how we can help you with our many membership benefits.