Measuring Mortality

Impact of Covid-19 On Life Insurance Claims Management

The integration of analytics is a necessity

New research from ExlService, authored by Namit Chopra, Vice President; Karl Canty, Vice President; Ankur Jain, Senior Engagement Manager and Tarun Rishi, Engagement Manager, looks at the relationship between pandemics and mortality. is it for more detail.

COVID-19 outbreak has had a devastating impact on people’s lives across the world and has caused the global economy to stall, the impact of which will be felt for a long time. As of September 15, 2020 globally there have been 29 million cases reported resulting in 933,000 deaths.

The US has been one of the hardest hit, with 6.7 million infected people resulting in 199,000 deaths. This increase in cases and deaths has also impacted the life insurance industry, both financially and operationally (1).

Though life policies in general typically include coverage for pandemics, mortality risk books of business overall are not expected to experience significant losses. However, it is expected that the number of claims is likely to increase, especially Life and short-term disability (STD) claims, as mortality rate is steeper for people above 55 years and majority of the infected people are part of the labor force.

The focus of this article is to analyze the impact of COVID-19 on the Claims Management process for Life insurers and how they can optimize their processes to better deal with the evolving scenario. This can be looked at in terms of the following 3 aspects:

  • Claims Experience – Analyzing the claims experience across various product categories under COVID-19 and how it will impact overall claims management.
  • Traditional Claims Workflow – Deep-diving into the traditional claims workflow, highlight the inefficiency of legacy processes to manage the spike in claims, and look at potential improvement opportunities.
  • Claims Workflow of the Future (Post COVID-19) – Envision and examine how analytics and RPA can be embedded at various stages of the workflow process through digital intervention to enhance the overall efficiency of the process.

Claims Experience

While the number of claims is expected to rise, the experience will not be same for Life, STD and LTD claims

  • Life Claims: COVID-19 follows an unusual ‘L-shaped’ distribution that disproportionally impacts individuals over 55 years old resulting in higher fatality in this age group. Though the higher mortality due to COVID-19 might be offset by the fact that ~50% (2) of the population is under some form of lockdown, COVID-19 could amplify existing health conditions and trigger higher mortality, as per WHO advisory.
  • STD Claims (Elimination Period 15 days): Likely As per CDC data, 71% of the infected people are the part of the labor force, which has an STD participation rate of 43% (3).

Thus, it is estimated that the number of claims arising as a result of STD will rise significantly as medical and home quarantine (approved by a physician) will impact people’s ability to work. STD wage replacement payments is expected to reach $1.2 billion (3) due to COVID-19:

  • LTD Claims (Elimination Period of 90 days): Due to lower incubation period, it is unlikely that there will be a direct impact on the claims. However, COVID-19 could aggravate mental health issues & cardiovascular conditions which currently account for ~17 % (4) of the claims. As per a Harvard Study (5), long-term health complications due to COVID-19 like lung problems, acute respiratory distress syndrome and heart damage, might increase the probability of conversion from STD to LTD claims.

As evidenced in the above points, the rise in claims across product categories will put additional pressure on the claims management infrastructure, especially the claims settlement process. Insurers are likely to face dual problem of rising volumes and payouts resulting in longer TAT and pending claims.

Impact on Business

As the current situation evolves, a rise in cases and deaths will put additional pressure on life insurers to optimally manage their claims workflow.

As per industry insights, insurers have experienced ~40% increase in overall query volumes in Q1 ’20 compared to the 2019 average. Insurers are expected to see a further rise in queries, which can be categorized as:

  • General: People who want to inquire about their coverage. The number of COVID tests in a particular geography would be a useful indicator for estimating this demand.
  • Claims: Include life, STD and potentially LTD claims in the long-run. The number of active cases in a particular geography would be a useful indicator estimating this demand.

Therein lies an inherit opportunity to optimize claims workflow management through digitization of the entire claims lifecycle. This paper highlights the inherent short-comings of the current claim management process and identifies enhancement opportunities through the introduction of advanced analytics and its benefits.

Traditional Claims Workflow

The current claims workflow process for most traditional insurers is inefficient to handle a major influx of claims arising due to COVID-19. The Call centers are not optimized to handle additional queries related to COVID-19. The traditional claims process flow lacks analytics maturity at various stages (Intake, FNOL, Claims segmentation, Investigation) leading to more human intervention and elongated cycle time in most of the organizations.

During a pandemic, efficiency and the time to process claims are critical for client expectation management, which is only possible if Insures can modernize their processes, handle the sudden spikes, and manage the available workforce efficiently...

The traditional process flow:

  • Intake: Notify your insurance provider or adviser of your intention to submit a claim through either call centers, emails or forms.
    Drawback: Fragmented touch points with limited capability to absorb and use unstructured information
  • Claim Assessment: Insurance provider will then commence the assessment of your claim. The claim will be assessed based on the information the claimant has provided through supporting documents.
    Drawback: Manual assessment of claims leading to human intervention


  • Initial Decision: Claims are handed over to the DCMs for further evaluation and a decision is taken.
    Drawback: Manual approval and rejection of claims.
  • Claim Management: After letters are generated, DCM takes decision to extend or file for claim closure.

As it can be observed, the traditional claims management cycle lacks analytical maturity and depends heavily on human intervention. As a result, the surge in claims request due to COVID-19 has resulted in pending claims and an overall increase in TAT for processing claims. Digitization as well as integration of advanced analytics into the claims management cycle is the need of the hour.

Having a way to embed analytics in the claims process presents a significant opportunity for life insurance companies to increase ROI. The enhancement opportunities could be listed as follows:

  • Digitization of FNOL: Digitize the entire process for First Notice of Loss to capture the important information provided by COVID-19 related claimants through an automated analytical process.
  • Complexity Scorecard: Assign complexity scores to COVID-19 related claims by using analytics driven matrices.
  • Claims Segmentation: Perform segmentation on COVID-19 related claims based on the complexity score to reduce human intervention and required FTE’s.
  • Claims Investigation: Investigate claims for fraud by using machine learning techniques.

Claims Workflow of the Future

Embedding analytics into the claims process redefines every step of the claim analysis. By doing so, it enhances the role of everyone involved in processing a claim, and has a direct bearing on the efficiency and the time to process.

The enhancement could be listed as follows:

Digitization of FNOL: Create a green channel for COVID-19 related calls. Use Speech analytics and text mining techniques to digitize the information provided by the caller in structural datasets. In case of death of a policy holder due to COVID-19, the claim will be processed through auto-adjudication.

Complexity Scorecard: Assign complexity scores to the claims based on the severity, cycle time, litigation potential, degree of suspicion, LTD potential etc.

Segmentation: Classify and segment COVID-19 related claims based on the complexity score. Assign complex claims to experienced handlers, where as fast claims can be processed through auto-adjudication with the help of RPA to process faster claims by:

  • Use STD to LTD conversion model to predict the probability of a possible conversion.
  • Use LTD duration model to forecast the LTD duration of a claimant.

Claims Investigation: Investigate the claims with classification model. Use external datasets related to COVID-19 at zip code and county level. Use social media data to further enrich the dataset.

SIU: Incase a fraud or discrepancy is reported by the classification model, hand over the case to special investigation unit for further investigation.

Chat Bots: With the help of intuitive chat bots, insurance companies can manage extra traffic due to COVID-19. Multiple parallel threads can be run to handle COVID-19 related queries of multiple users and help answer FAQs, drive engagement, lodge claims and gather additional information from brokers and users.


COVID-19 has caught the world off-guard and most of the major economies are struggling to curtail the spread of the virus. The sudden spike in number of infected people has put a tremendous pressure on the Life Insurance Industry, the traditional claims management workflow is not equipped to handle such spikes and depends heavily on human intervention. COVID-19 has created serious workforce disruption due to lockdowns as well as surge in pending claims and increase in TAT for processing claims.

In the post COVID-19 world integration of analytics into the claims management is not an option; it is a necessity. During a pandemic, efficiency and the time to process claims are critical for client expectation management, which is only possible if Insures can modernize their processes, handle the sudden spikes, and manage the available workforce efficiently. Integration of advanced analytics and digitization of the claims workflow through embedded analytics and RPA will not only cut costs in managing claims but significantly improve the efficiency and help detect fraudulent claims.




(2) Business Insider article dated 3/27/20;
(3) IBI research April 2020;
(4) Council for disability awareness report 2019; (5) The Harvard Gazette: Coronavirus and the Heart