Claims management: Addressing the challenges

Since managing public perception is one of the biggest challenges during the claims management process, it is imperative to empower claimants by guiding and educating them throughout the life of their policy and during the entire claims process.

A lack of consumer confidence, among others, causes some claimants to inflate their claims because they find it difficult to believe that the insurer will act in their best interest.

Building confidence

By reminding claimants that it is in the best interest of the insurer and other role players such as brokers or underwriting management agencies (UMAs), for example, to operate with integrity because they are registered as financial services providers (FSP) under the FAIS Act and the Short-Term Insurance Act, which makes them accountable for their actions; clients’ minds can be put at ease that their claims will be paid if their loss is covered and the claim is valid in terms of their policy agreement, terms and conditions; and that the principles of equity and fairness will be applied throughout the claims management process.

Communication is crucial

To build consumer confidence in the insurance industry as a whole, ongoing and transparent communication - particularly during the claims management process - is vital.

Claims specialists should also take the claimant’s circumstances into account. The claimant may have been traumatised by the event he or she is claiming for; and for this reason, should be treated with utmost empathy; even more so when the claimant suffered a big financial and/or emotional loss.

Systematic approach

From an operational point of view, it is important to have all the correct facts and figures at hand, and to educate all industry role players involved eg assessors, UMAs or brokers on the exact route that needs to be followed during the claims management process.

Centriq, for example, follows a three-tier approach when it comes to the repudiation of claims in order to apply the principles of equity and fairness at all times. Once a UMA, for example, has made the decision to submit a claim for repudiation, the claim is submitted to a claims specialist for validation and verification. Should the company not be able to accommodate the claim, lawyers are consulted, especially where large amounts are concerned, to verify and confirm the repudiation.

In real life

The importance of such a thorough approach can be illustrated by a real life example.

An insured, by his own admission, consumed about ten drinks before he was involved in a motor vehicle accident. The insurer repudiated the claim, where after the insured submitted a claim to the Ombudsman, who ruled that the insurer had to prove drunken driving to repudiate the claim. The insurer called in the help of a forensic pathologist, who considered the amount of alcohol the insured consumed, the meals he had in between, his body mass and height. Based on this, the pathologist concluded that the insured was not intoxicated and the insurer paid the claim.

Start right

In general, however, the most effective way to prevent and mitigate the non-payment of claims, is for insurers to ensure that all the associated risks and rewards are taken into account during the product development and underwriting stage – which means that all the departments need to work closely together - while client liaison executives, financial intermediaries and other role players should encourage policyholders to regularly check their policy schedule for items and amounts insured, taking into consideration the exclusions and preconditions that apply to the insurance contract.