From the moment news of COVID-19 started spreading, insurance carriers knew there would be a significant business impact. Exactly what the impact would be was not immediately clear, and still leaves some room for guessing.

First, claims saw a sharp decline as the Coronavirus started hitting worldwide. For the most part, this came as no surprise. With fewer cars on the road, fewer accidents result in damage claims. There are fewer ways for people to hurt themselves if they never leave their homes. Workers’ comp claims decline when the workplace is nearly empty. This was an anticipated and completely logical result.

As the world started to come alive after 3 months and “life as normal” began to resume, claims volume started trending back toward normal. This regional trend was steady as municipalities loosened restrictions.

Friss, a Dutch tech company that provides fraud-detection software to 180 insurers, suggests that now a fraud storm is well underway.

The company said in a blog post last week that it has seen a strong uptick in the volume of fraud investigations tracked by its detection software, even though total claims volume is down. In other words, even though there are fewer claims, a higher proportion of them look suspicious.

A graphic that showed a declining volume of claims starting when coronavirus lockdowns began in March and leveling off as lockdowns eased in June. A corresponding line showed the share of claims investigated rising sharply, easing and then rising again. Exact percentages were not revealed.

“We’ve seen this before in economic downturns and other times of hardship, and sadly we predicted this at the onset of the pandemic.”

Inflated COVID-related cleaning charges, fake testing locations and non-existent telemedicine visits are just a few of the emerging fraud schemes the company is seeing. Unethical customers are aware of what they can get away with. They are also adept at coming up with new schemes – quickly. When the opportunity is available, it will be taken advantage of.

The take away from this trend is “that carriers who wish to weather the storm must remain diligent on treating their customers well. Policies must be easy to obtain at a competitive price, and claims handling must become more efficient and customer-centric. Modern carriers must adapt quickly and provide the service their customers demand.”