Claims: How Tech Can Help Insurers Cope During Stormy Weather

During a spike in claims, adjusters and claims reps struggle with system slowdown and bottlenecks.

Legacy systems cannot handle the volume and third-party integrations become overwhelmed.  This creates stress for both the claimant as well as the claims teams.  A number of techniques can alleviate or reduce these issues. One such as optimized orchestration between the core policy administration system and claims applications can help. It’s critical to keep the claims intake volume flowing and not have system limitations slow down the process. Techniques like asynchronous processing, minimal validation or queuing can help absorb the volumes without crashing.

Claims teams can also consider other options in system design that reduce the load on core systems.  For example, simple claims may be prioritized for automated processing or routed to a different team queue. Claims managers may decide to use minimal validation for some claims and want to override normal settings.   In many situations additional staff are added or TPA’s may be used as a backup. The architecture should incorporate flexibility to handle this temporary growth in claims staff. A solid orchestration design takes a “what if” approach and considers all the potential bottlenecks if the system is overwhelmed.

2. Enhance customer support systems

Extreme weather events bring an influx of inquiries. As more policyholders interact with payment platforms, insurers must prepare for increased support needs. A payment provider with scalable customer support solutions can alleviate this burden, reducing operational cost and improving the customer experience.

3. Prioritise robust fraud prevention measures

High-demand periods often see a rise in fraudulent activity, with opportunistic individuals using major weather disruptions to stage incidents, exaggerate damage or make false claims. By implementing advanced fraud detection tools at key touch points, such as payment windows, insurers can protect both their operations and their customers – ensuring that only legitimate claims are processed and paid.

When you think about it, a parametric payout is a promise that many smaller companies and businesses really need. It can help save jobs when the worst happens, so this type of automated payment on weather damage claims can be a powerful marketing tool for insurers.

Ross Sinclair, Founder and CEO at EIP, comments:

“With climate-related disasters rising in the past decade, business interruption claims have surged. Increasingly, firms are having to take legal action just to get a payout.

“For small businesses with restricted cash flows, this is existential. Natural disasters and weather-related events already cripple operations and long legal battles drain what little capital remains, pushing owners to the brink. It’s therefore little surprise that 90% of businesses in the US fail within two years of being hit by a disaster.

“This is where parametric insurance cover can play a role. These policies agree the payout upfront and tie it to a clear trigger. For example, if floodwaters reach a set depth, payment is released automatically, without a long waiting period or dispute. This certainty gives small businesses a better chance of staying open and supporting their employees and the communities around them.”