Claims Management

Claims settlement is one of the most important aspects of the functioning of an insurance company.  Out of any insurance contract, the customer has the following expectations:

i.   Adequate insurance coverage 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.
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.

The insurance companies generally handle the claim rather than manage them. Typically this process (of claims relating to physical damage of assets) 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 covered under the Policy.
ii.   A surveyor is appointed who visits the spot, do the assessment and submits the report.
iii.  Insurance company examines the report, calls for relevant supporting documents.
iv.  On receipt of survey report and documents, the same are examined. The claim file is processed and settlement is offered.
The claims handling is thus more process oriented and does not pay adequate attention to the monitoring and service parameters.
In view of the above mentioned attitude of the insurance companies, there are many difficulties faced by the policyholders. It is an accepted fact that most of the customers’ complaints relate to claims.

Though IRDA guidelines on ‘protection of policyholders’ interest’ stipulates certain
obligation  on  the  part  of  insurance  company  including  time  limit  for  claim settlement, still it is observed that insurance companies are not always act responsibly or with enough sensitivity towards the policyholders.  Insurance Companies often do not           undertake necessary follow up steps for timely submission of    report from the surveyors as per IRDA regulations. Even  after  submission  of  report  and  completion  of  other       requirements, it takes a lot of time  to finally issue settlement cheque and its       delivery to the claimant Various court judgments and consumers forum awards bear testimony to the inefficient handling of claims by insurance companies in India.

Role of Brokers
It is in this context that the role of brokers becomes crucial. Though IRDA has only mandated that brokers would provide assistance in negotiation of claims and maintain records in respect of claims, in practice the role of the brokers exceed what IRDA has mandated. A good broker has to ensure that the entire process of the settlement is hassle free as far as the policyholder is concerned. This involves a huge amount of follow up with various agencies (surveyors, motor garages, TPA’s, hospitals etc.). It also involves a prior knowledge and experience of documentation involved with different types of claims.
We at JK Risk Managers and Insurance Brokers Ltd are well equipped to handle claims on behalf of our clients as we are a team of both experienced and young professionals from diverse backgrounds and expertise to facilitate claims.