Rapid Assessment of Disability Claims During and Post COVID-19
Eligibility monitoring for increased disability claims during & post COVID-19.
Updated March 31, 2023.
In the past, downturns in the Canadian economy have triggered higher than normal insurance disability claims. The current COVID-19 pandemic has caused an exceptionally large spike in life and disability claims – both legitimate and fraudulent.
This increased level of disability claims translates into up to 30 per cent in higher costs of group benefits and insurance for employers. Higher premiums are hard for the many businesses already reeling from the economic challenges of the pandemic. Having to pay an extra $300 per staff member could prompt small and medium businesses to opt for reduced health benefit plans, layoffs or wage freezes.
How We Are Solving It
The Rapid Assessment of Disability Claims During and Post COVID-19 project aims to limit the rise in premiums by building a tool to identify the fraudulent applications that could make up to 10 per cent of disability claims. These claims can rapidly escalate insurance costs.
Project lead, Owl Labs, is enhancing a technology platform that can more rapidly assess disability applications and supporting evidence to see if the application meets eligibility requirements while flagging suspicious claims. Current methods rely primarily on manual analysis and depend on agents reviewing based on their instincts during interactions with applicants or claimants’ refusal to submit documents on time. This process only uncovers a small portion of fraudulent claims leaving Canadians and Canadian businesses susceptible to increased premium payments.
The automated review process looks for supporting or suspicious evidence, then uses that to provide agents with a prioritized list of highly suspicious claims and only the related evidence for further review. This is expected to boost the fraud detection rate by a factor of four and eliminate the human biases that typically cloud the manual process. In addition, this tool ensures more privacy because an investigator does not have personal details on all applicants and the process is encrypted from start to finish.
Automated assessments will also help speed up payments to eligible applicants, helping those individuals in their time of need. In the future, the platform will be adapted to help detect fraud for other types of insurance, including workers compensation and health.
The project looked to minimize the broad financial impact of COVID-19 driven claims on Canadians by minimizing the expected increase on insurance premiums for Canadians and their employers resulting from those malingered claims. Collaborating with Canada’s premier insurance, reinsurance, legal and tax firms, they reviewed more than 15,000 disability claims and identified 4x more potential of fraud compared to historical methods. The project also resulted in significant growth for Owl Labs including $37M in new funding and executing commercial agreements with a number of U.S. and Canadian disability carriers to save up to millions in fraudulent claims paid and thus prevent increases on customer premiums.