Covid 19 deaths are bringing a set of New Challenges to the Funeral Insurance Sector
Covid -19 has brought to bear a number of significant challenges to the Funeral Insurance Sector. Save the obvious elevated claims activity arising from increased mortality, there is also an increased level of urgency in the assessment and settlement of funeral insurance claims.
Under normal circumstances insurers would be complemented for settling a funeral insurance claim within the legendary 48 hours from receipt of all supporting documents. With regulations requiring funeral to be conducted within three days in the case of Covid related deaths, the financial stress on the bereaved families is much more immediate. Funeral homes are also challenged for capacity and some are therefore insisting on upfront payments. This leaves very little time for assessment of claims and decisions on the validity of a claim sometimes have to be made based on an incomplete set of required documents.
Add to this the social distancing requirements, meaning that a lot of staff are working remotely. Add also the fact that an estimated 20% of funeral insurance claims are fraudulent, the pressure in claims departments becomes even more arduous. The normal capacity of any claims department was never geared to deal with such an enormous rate of claims and it takes a bit of time to adjust capacity to the required level. The situation as it prevails also requires that senior claims personnel be involved much earlier than normal in claims processes as decisions may have to be made based on insufficient documents.
A suggestion to funeral insurers is that they communicate with their clients and make sure that they understand their claims procedures as well as the supporting documents required. Promote and support digital claims processes and submission of documents to shorten both the time and the distance between a client and yourself. It may also assist to enter into agreements with Funeral Homes who will take care of the business whilst the claim is being processed.
Petros Phumelele Mbewu
Petros is the co-founder and Executive Chairman of NESS Consulting (Pty) Ltd, a licensed administrator and distributor of funeral insurance products. You can contact him on firstname.lastname@example.org.