The handling of claims is key to successful customer relationships.
Fiona Andrews outlines the essentials that claims personnel need to know
When people buy insurance they are buying the promise that their justified claims will be paid swiftly and according to the stipulations of the policy.
Thus claims represent the acid test for any insurance company. Handled well, they satisfy expectations, build confidence and improve perceptions. Handled badly, they jeopardise relationships and threaten commercial profile.
Companies must remain vigilant in determining the merit of any claim. The central plank of any successful claims strategy is fairness to would-be claimants, other policyholders and shareholders.
That said, it is easy to see how problems can arise: the insurer's definition of ‘fair' might differ from that of the policyholder. It is therefore necessary to treat claims with sensitivity, skill and openness.
The FSA is committed to monitoring the performance of insurers in claims handling. Successful compliance hinges on carrying out claims activity in line with FSA regulations.
A degree of tension will often exist between claimants and insurers. Many people's (mistaken) attitude is that, while insurers are happy to accept premiums, they always resist paying claims. To counter this belief the industry needs to address its own approach. Only then can it reasonably expect something similar in the wider world.
Improvements will flow from an acknowledgement that claims are a marketing tool.
A claim should not be the end-point of a relationship but an integral part of it. But improving the way claims are viewed generally does not mean paying out in dubious or unjustified cases.
Claims may be a deeply technical subject, but it is also about communication. It demands clarity and consistency coupled with humanity. Claims personnel need a balance of specific qualifications and ‘soft' skills.
The CII and the Chartered Institute of Loss Adjusters have acknowledged the importance of claims with the creation of the Faculty of Claims, which will champion the development of this vital element of insurance.
All those involved in the claims handling process should as a minimum have a knowledge and understanding of the claims handling process, including notification, assessment, settlement and associated financial factors.
Claims personnel require a core knowledge and understanding for this class of business that should include the following elements.
General procedures for notification of claims
Insurance products and related services
Practitioners should know the features and the detail of typical policy cover of common products and the claims-handling procedures associated with them. This extends to additional product services such as helplines, authorised repairers, risk control/advice, legal costs services and uninsured recovery services.
Claims handling systems
Practitioners should know how claims can be settled by payment of money, paying for repairs direct, replacement and reinstatement coupled with an understanding of:
Given the importance of claims to the fortunes of insurers and their customers, it is essential that staff acquire the necessary technical understanding so that they can deliver an accurate and proper service. But they must also recognise the unique nature of the claims environment and tailor their approach accordingly. IT
‘ Fiona Andrews is manager of the Faculty of Claims and head of CPD at the CII
Test yourself on claims
The market-standard examination subject for those wishing to gain a formal measure of their understanding of the subject is the paper within the CII's Certificate in Insurance qualification: Insurance claims handling process (IF4). See how you do with these questions taken from the examination guide:
Q1. The Claims and Underwriting Exchange was set up to help detect fraud in which class of business?
A Commercial insurance
B Health insurance
C Life insurance
D Personal lines insurance.
Q2. Within what maximum timescale is an insurer able to initiate a claim against a police authority following a riot?
A 7 days
B 14 days
C 21 days
D 30 days.
Q3. A policy condition where claims below a set level are NOT paid but claims above this level are met in full, is known as a policy:
Q4. Under the Arbitration Act  the resultant decision from any arbitration is binding on:
A Neither the insured nor the insurer
B The insured only
C Both the insurer and the insured
D The insurer only.
Q5. In calculating claims reserves, motor insurers will make most allowance for ‘incurred but not reported' (IBNR) under the heading of:
A Own vehicle damage
B Rugs, clothing and personal effects
C Third party personal injury
D Third party property damage.
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