Claims Handling Process Overview
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An Overview of Insurance Claims Operations Presented by Sneha RoyChoudhury for CPCU - India Chapter
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Claims Handling Process Overview
- 2. Sneha RoyChoudhury AINS, AIS Sr. Trainer – Arthur J. Gallagher & Co. Sneha.RoyChoudhury@AJG.Com @sneharchoudhury
- 3. •Arise out of a contract between the claimant and the insurance company. •Claim is made by a policy holder to his or her own insurance company 1st Party Claim •Claim is made by an injured person against the insurance policy that covers the at-fault person (the insured) •Also called a liability claim 3rd Party Claim Types of Claims
- 4. Basis for a legal right to recovery Torts Negligence Intentional Acts Strict Liability Contracts Liability assumed under contract Breach of Warranty Statutes Legal Basis of Liability Claims
- 5. Damages Compensatory •Special •General Punitive Determining the Loss Amount
- 6. Centralized Approach •A centralized approach consists of either one home office where all claims are handled or a home office with a few regional offices. •Centralized operations are more efficient that decentralized operations in terms of cost of rental space, supervisory overhead, MIS, and support staff. Decentralized Approach •Decentralization can be more costly/difficult to supervise, but allows for adjustment to occur in person -- because claim tasks can not be done as well from remote locations, claims can never be completely centralized. Organization of the Claim Settlement Process
- 7. Note: Public adjusters are not part of the claim department. Personnel Staff claim representatives Independent adjusters Employees of TPAs Producers who sell policies to insureds Claim Department – Personnel
- 8. Keeping the insurer's promise Promise Made Promise Fulfillment Supporting the insurer's profit goals Manage and control all claim function expenses. Using appropriately priced provider & services Pay only legitimate claims. Ensure fair settlement Goals of Claim functions
- 9. Ethics Choice between two ore more acceptable courses of action. Professionalism Behavior & quality necessary to properly implement an ethical decision. Professionals should also act knowledgeably, courteously, and empathetically. It is of utmost importance to insurers and claim representatives when they are establishing good faith. Ethics & Professionalism
- 10. Concerns arising from CR’s professional activities Conflicts of interest Competency & continuing education Licensing Customer service Ex parte contacts Billing practices Privacy Fraud Detection Ethical & Professional Concerns
- 11. Concluding the claim Determining the cause of loss, liability & the loss amount. Investigating & documenting the claim Incoming Claim Acknowledging & assigning the claim Identifying the policy Contacting the insured or insured’s representative Claim Handling Process-An Overview
- 12. •Mode •Assignment •Purpose •Time requirements Acknowledging & assigning the claim •Policy period •Coverage for loss •Policy terms & conditions •Identify areas for investigation Identifying the policy •Purpose •Timing & Venue of contact •Preparation & initial contact •Good faith •Waiver, Estoppel, Nonwaiver agreement Contacting the insured or the insured’s representative Claim Handling Process
- 13. Types of Investigation Claimant Insured/ Witness Accident scene Property damage Medical Prior claim Subrogation & recovery Investigating the Claim
- 14. Documentation File status notes File reports Internal reports Large loss Preliminary Status (Interim) Summarized (captioned) External Documenting the Claim
- 15. Concluding the claim Pay the claim Dispute regarding the settlement amount. ADR Litigation Closure Closure Litigation Closure Closure Deny the claim Acceptance of denial Closure ADR Litigation Closure Concluding the Claim
- 16. Sneha RoyChoudhury AINS, AIS Sneha.RoyChoudhury@AJG.Com @sneharchoudhury Thank You