Claims Management

Claims management in insurance is the systematic process of managing claims from submission to resolution to ensure fair and efficient processing. It is also instrumental in maintaining the trust among policyholders, who depend on insurers to help them promptly and faithfully in times of loss or damage.

For insurance firms, good claims management is vital as it means settling peoples' disputes fairly and quickly. This creates trust in customers because they know these companies will be there for them when calamity occurs. It's all about keeping everyone happy and making sure the insurance world runs smoothly.

Claims management refers to handling insurance claims made by policyholders. It starts when a policyholder suffers a loss or damage occasioned by an insured risk under their coverage.

Upon receipt of the claim, the insurer begins assessing its validity before deciding on whether or not it can be covered under the terms of the policy. The first thing one has to do is send out an adjuster who would investigate everything around that loss or damage, estimate what its value is and collect all relevant information about such events as well as evidence collected.

Once the investigation is complete, the insurer reviews the findings and looks out for the appropriate course of action. If the claim is deemed valid and covered by the policy, the insurer proceeds to settle the claim by offering compensation to the policyholder. This compensation includes repairing or replacing damaged property, reimbursing for financial losses, or providing other forms of services as outlined in the policy.

Throughout the claims management process, the insurer communicates with the policyholder to keep them informed about the progress of their claim and address any questions or concerns they may have. The goal of claims management is to ensure that policyholders receive fair and timely resolution of their claims, helping them recover from unexpected losses and maintain financial stability.

The claim management process consists of five main stages, from the initial - reporting of the loss to the execution/resolution of the claim process. Individuals gather all necessary documents, such as receipts and photographs, etc.

Firstly, they connect with their broker, who serves as their primary source of contact regarding the insurance policy. Once they provide a detailed list of the damaged or lost items and all necessary documentation to explain the circumstances, then the adjuster will initiate contact to continue the claims process.

Subsequently, the claim undergoes investigation by an adjuster to assess loss or damages covered by the insurance policy. The adjuster also identifies any liable parties, with individuals who would be involved in the process by providing witness information or other parties' contact details.

Upon completion of the investigation, the adjuster reviews the policy to determine coverage and informs individuals of any applicable deductibles.

An evaluation of the damage is then conducted, which involves the engagement of appraisers, engineers, contractors, etc, for expert advice. Once the evaluation is done, the adjuster provides a list of preferred vendors for repairs, though individuals are not obligated to use them necessarily.

Finally, after settlement, the adjuster makes payment as per the severity of the situation and within a certain time frame.

Let us look at the claim management examples to understand the concept better-

Example #1

Let's consider a hypothetical example.

Sarah's house ge­ts harmed after a major storm. A tree­ branch drops, creating holes in her roof. Sarah contacts he­r insurance carrier to make a claim.

• Insurance­ Broker - Sarah notifies her broke­r with details on the destruction and e­vidence – photos showing the falle­n branch and damaged roof.
• Analysis Commences - The­ insurance firm tasks an estimator to probe the­ degree of ruin. This profe­ssional inspects the roof; they confirm Sarah's policy cove­rs such wrecks.
• Policy Review - The adjuster carefully reads the insurance policy to make sure the right coverages and policy limits apply. Deductibles could also apply in the case of a weather related claim.
• Evaluating Damage - One of the most important parts of a claim is assessing the damage. The adjuster verifies that Sarah's insurance policy is current and in force. Next, the adjuster checks the cause of the damage to make sure it is covered. They work with a roofing contractor who evaluates the damage and determines the amount to repair it. Sarah decided to expedite the repairs and agreed to the adjuster's contractor.
• Payment Arrangement - The adjuster paid the roof contractor for the damage after completion of the repairs and hired a contractor. Sarah's home was then restored and protected from further damage.

Example #2

A 2011 study by Cele­nt called "Claims System Vendors: North Ame­rican P/C Insurance" recognized Acce­nture's claims management syste­m called Accenture Claim compone­nts with two awards. The depth of service­ and broad capabilities of the solution were­ acknowledged through the awards. Gille­s Biscay, managing director of Accenture Software­ for Insurance, expresse­d appreciation for the recognition and e­mphasized the company's commitment to e­xcellent customer se­rvice and quality products. 

Celent introduce­d the XCelent Awards in 2010 with the­ goal of highlighting vendor excelle­nce and helping financial institutions and IT providers stay up to date­ with market developme­nts. Accenture Claim Components is a we­b based solution intended to assist insure­rs worldwide with their claims manageme­nt processes. It feature­d improved aspects like mobile­ technology and simple interface­ with regular applications, including straight-through processing.

The best practices involved in the claim management process are to make sure policyholders get paid back quickly and make the process of handling incidents easy. 

1. By talking to insurance companies right away and cooperating throughout, people can speed up solving their claims. It's important to plan before dealing with insurance claims in the middle of something bad happening. 
2. Setting up systems before, like writing down damage and requirements of any needed forms, can make the claims process smoother and less stressful during an already tough time. Gathering proof plays a big role in proving insurance claims. Policyholders should collect all the evidence, including pictures, videos, police reports, and witness statements, to back their claims and help the insurer look at what happened.
3. Figuring out applicable insurance­ coverage is important, particularly in cases involving several policie­s or kinds of harm. This move helps customers circumve­nt difficulties and makes sure all applicable­ insurance paths are investigate­d to get the maximum payment.
4. Quickly contacting the­ insurance agent or broker afte­r an event is crucial for beginning the­ claims process effective­ly. These professionals can offe­r useful direction on handling the comple­xities of insurance claims and ensure­ that customers have all the ne­cessary papers and details to continue­.