Frein

Claims handling is one of the most complex issues for insurance companies. It involves activities such as opening and closing claims, making payments, reserving claims, carrying out subrogation recoveries, and working with service providers.

Insurance claims are also susceptible to fraudulent activity. As a result, the information required to combat insurance fraud is an important part of insurance business intelligence.

Underwriting and claims settlement are the two most important aspect of the functioning of an

insurance company. Out of any insurance contract, the customer has the following

expectations:

i. Adequate insurance coverage, which does not leave him high and dry in time of

need, with right pricing.

ii. Timely delivery of defect free policy documents with relevant endorsements /

warranties / conditions / guidelines.

iii. Should a claim happen, quick settlement to his satisfaction.

For the purpose of this article, we shall be concentrating on (iii), as (i) and (ii) relate to

underwriting, though proper u/w facilitates claim settlement. Unlike life insurance, where

all policies necessarily result in claims – either maturity or death – in general insurance

not all policies result in claim. Approximately around 15% policies in general insurance

result in claim. The claim settlement in general insurance thus have their own

peculiarities and therefore need proper handling. Also how 15% policy holders are

attended is of great importance. The services being rendered will determine the attitude of

the customers. How the services being rendered is perceived by the customer? That also

needs to be kept in mind. Do we have a mechanism to find out the same?

The insurance companies have hitherto been handling the claim rather than managing

them. Typically this process involves –

i. As soon as a claim is reported, the insurance company checks as to whether the

cover was in force at the time of loss and whether the peril is...