Claims Staff

Question 1

The claims department is the ‘shop window’ of the insurance company as it is really only when a (???) comes to make a claim that they find out the value of the insurance they have been paying for.

Answer 1

Policyholder

Question 2

How does The claims department play an important role?

Answer 2

in shaping the opinion policyholder has of their insurer.

Question 3

Furthermore, which department is a vital component in ensuring the proper management of pooled funds.

Answer 3

the claims department

Question 4

For these reasons, it is vital that the claims department is efficient, and is staffed by competent and professional claims handlers.

Answer 4

True

Claims department

Question 5

What is the role of a claims handler?

Answer 5

deal with all submitted claims quickly and fairly with all claims submitted;

distinguish between genuine and fraudulent claims.

estimate accurately the final cost of outstanding claims; and

settle claims with the minimum of wastage or avoidable overpayment (this is also known as leakage);

Question 6

This overview embraces the two pronged function of the claims department :

Answer 6

Service standards and managing customer expectations.

Question 7

Customer service has become a dominant issue for a number of reasons.

Answer 7

True

Service standards and managing customer expectations.

Question 8

Consumer awareness ??

Answer 8

Consumers are more aware of their increased rights and insurers have had to react accordingly.

Question 9

Consumers ALSO have a much stronger voice with the rise of social media platforms, such as Twitter and Facebook, and are becoming more vocal about perceived poor service.

Answer 9

True

Consumer awareness

Question 10

Consumers are more likely to share a bad experience online, which could have damaging consequences for an insurer’s reputation.

Answer 10

True

Consumer awareness

Question 11

Customers are ever-increasingly expecting value-added services, driven largely by insurers’ marketing campaigns.

Answer 11

True

Expectation of service

Question 12

Service can be used to sell products over price, although most consumers will opt for price in the first instance.

Answer 12

True

Expectation of service

Question 13

Insurers cannot expect to compete with other insurers if they are not satisfying their existing customers’ needs.

Answer 13

True

Competition

Question 14

In addition, there are new disruptors entering the market which, through the application of new technology and techniques, may be able to provide a better customer service experience and have a greater ability to provide the service the consumer expects.

Answer 14

True

Competition

Question 15

These increasing consumer demands have led to improved customer service and an increase in the skills and professionalism, provided by??

Answer 15

The claims handlers.

Question 16

As with any department or firm, a claims department will have a philosophy that will embrace its service standards, i.e.

Answer 16

How it intends to deal with the claims presented to it by its customers.

Question 17

In addition, every insurer will have an approach to key claims issues.

Answer 17

True

Service standards

Question 18

The service standards, as documented within the claims philosophy, will USUALLY have a general section setting out the broad approach and covering the following:

Answer 18

• how valid claims will be handled.

* the quality of service aimed for;

Question 19

The service standards, as documented within the claims philosophy, will USUALLY have a general section setting out the broad approach which will then ALSO be further developed, covering such issues as:

Answer 19

• the nature of the claims service at each stage of the claims process;
• the speed of the claims service; and
• the economic efficiency of the claims service.

Question 20

The service standards ,

should balance the need to treat the customer fairly, efficiently and sympathetically with the need to ??

Answer 20

ONLY pay claims that are valid.

Question 21

While it is good practice to maintain quality service standards, consumers are likely only to measure their experience against their own perception of what good looks like.

Answer 21

True

Service standards

Question 22

The perception could come from an experience of a different sector, or even a previous claim with a competitor.

Answer 22

True

Service standards

Question 23

Insurers need to be able to adapt to, and ideally stay ahead of, the ever-changing demand of public expectations, rather than simply refer to a published set of standards.

Answer 23

True

Service standards

Question 24

What can the publication of a claims philosophy act as?

Answer 24

Act as a strong statement of the service the insurer intends to provide.

Question 25

What does the Claims philosophy create??

Answer 25

A degree of accountability should the customer experience not match the expectations created.

Question 26

What are the benefits of providing good quality customer service?

Answer 26

Good customer service can come in many different shapes and forms, typically, it incorporates:
efficient and prompt notification, investigation and settlement of a claim.

Question 27

It is USUALLY considered to involve treating the customer fairly, with empathy and as a fellow human being.

Answer 27

True

Service standards

Question 28

Providing good customer service does not only benefit the customer, the insurer ALSO benefits.

What are the main benefits of quality customer service??

Answer 28

• attracts and keeps high-quality employees through increased job satisfaction;
• attracts new customers;
• encourages customer loyalty: it is a lot cheaper to keep customers than it is to gain new ones;
• improves a company’s profitability;
• increases productivity;
• improves the working environment;
• marks the company out from its competitors.

Question 29

If a customer’s claim is not handled according to their expectations it can lead to severe dissatisfaction, and It can lead to protracted disputes which are costly for insurers.

Answer 29

True…

Question 30

Who or what is a ‘third party’ in respect of insurance claims?
And who are parties one and two?

Answer 30

The first party would be the person or company insured by a particular insurance company (i.e. the policyholder) .

The second party can be viewed as the insurance company insuring the first party.

The third party refers to anyone else involved in a loss event,

Question 31

e.g. in a motor accident a third party could be another vehicle owner, property owner, a passenger or a pedestrian.

Answer 31

TRUE

Question 32

Handling third party claims is an extremely important part of the work of a claims department.

Answer 32

True…

Third party claims

Question 33

For instance, a motor policy will include:

Answer 33

Cover for personal injury to, and

damage to the property of, third parties.

Question 34

What will insurer do If notified of a claim by its insured and they indicate that there is third party property damage or injury?

Answer 34

The insurer MUST start to take the necessary steps for handling these third party claims as soon as possible.

Question 35

The third party does NOT, however, have a contractual relationship with the insurer.
This has the following consequences:

Answer 35

• The amount of pressure a third party can exert on the insurer to respond quickly will USUALLY be less, as the insurer owes no loyalty to the claimant.
• Conversely, a well-handled third party claim may result in that claimant moving their own policy to the insurer at renewal.
• In practice, the claim is likely to be presented to the insurer by the claimant or their representative
• The recovery of legal costs will GENERALLY be more common as a third party is more likely to use the services of a solicitor.
• The third party’s expectations of the level of claims service may be greater than those of the insured because they may be hostile (they are, after all, the victim of the insured’s negligence), and may see the insurers as the insured’s agent.
• The third party may not identify with the insurer, and so may be more prone to exaggerating their claim.
• The third party must, legally, pursue their claim against the insured, not the insurance company (which will then indemnify its client).
• A third party will not be fully compensated in the event of contributory negligence (i.e. when they’re partly to blame for what happened).
• A third party will not be liable for any excess or deductible.

Question 36

If the third party is successful in their claim the insurer will USUALLY be obliged to pay?

Answer 36

their legal fees,

unless the size of the claim does not enable recovery of legal costs.

Question 37

What other issues that arise when managing third party claims??

Answer 37

• The third party claims are liability claims and could be more complex in comparison to other claims; and
• a third party’s final option in a dispute is litigation and they may be more willing to issue court proceedings if they are not managed fairly.

Question 38

If there is no contractual obligation to do so, why does the insurer go through this process??

Answer 38

it is common and good practice for an insurer to manage the needs of a third party to the same standards as are applied to a paying policyholder.

Question 39

What will this ensure to the claims handling process?

Answer 39

It avoids disputes and delays, and may lead to increased business in the longer term.