Issue: February 2020 | Life | Download PDF | English
By Mary Enslin, Life/Health Claims Specialist,
Cologne Anke Siebers, Life/Health Insurance Education
Consultant, Cologne
An
effective risk management process needs to address risks arising from all the
different parts of the ongoing insurance cycle, i.e. product design, pricing,
sales, underwriting, and claims assessment. Only with a continuous link between
these components can insurance products be successful and durable.
Whereas
underwriters evaluate the risk of potential clients in order to decide about
the best premium for both – client and insurance company – claims assessors
determine which claims are to be paid in accordance to the terms and conditions
specified in the insurance contracts. They are two equally important roles in
the insurance process but with different perspectives.
The role of claims in the insurance life cycle
Professional
claims assessment and expertise play a vital role in the results and the
public’s perception of a company, as well as influencing future changes to
product design and underwriting practices. Claims assessors decide if the
policy is valid, if the event corresponds to the policy conditions and if the
client is eligible for benefits.
The
insurance contract can be viewed as a promise to assist the insured when an
unexpected event occurs. It is the claims assessor’s job to honor this promise
while ensuring that the company is protected against error and fraud. If claims
assessment is too lenient, the overall profitability and results will be poor,
which in turn will have a negative effect on all policyholders. However, if
claims management is too strict, there will be adverse publicity and potential
reputational damage for the company.
Claims
and underwriting departments work closely together. Therefore, claims assessors
should have an understanding of risk assessment because in processing claims
they not only review the claim documents but also compare the information from
the claimant with all the information available from the underwriting process.
On the other hand, the claims department provides information to the
underwriters. It passes on loss information and correlations detected in the
processed claims. On the basis of these details, underwriting guidelines and
policy wordings will be reviewed and adapted where necessary.
Hence,
the claims assessor’s role is more than identifying and paying valid claims; it
plays an important part in an insurance company’s external image and the
promises made. Claims assessment is a critical balancing act and requires
specialised skills and knowledge.
The importance of well-trained claims assessors
The wide
variety of products requires a comprehensive knowledge in different insurance
fields (Life, Critical Illness, Disability, and Health), and claims assessors
must be capable of building a structured claims management strategy across all
of these products. They collect, handle and document all essential information
related to each individual claim and bear the responsibility for claims
settlement costs – the money to be paid out but also additional costs, e.g. for
medical examinations, visits to the claimant or hiring a private investigator.
In
addition to being a structured project manager, the claims assessor also needs
to be a communication expert, providing empathetic advice to clients. Also, an
assessor is a crucial part of the company’s quality management process in
giving feedback to underwriting and product design. Only a well-trained claims
assessor can meet all these requirements.
Targeted
training can prepare an individual for coping with the rising demands in claims
assessment, ensuring an optimum quality of decisions. Gen Re Business
School has developed a compact training programme
that addresses different lines of insurance in four modules.
Get in
touch with your local Gen Re representative
to learn more about our training courses.
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