IF4.5 Claims handling systems Flashcards
What does IT relate to?
the storage, production and communication of information
Characteristics of Insurance claims
-volume of claims
-complexity of claims
Types of claims transactions which need to be processed
- claims reserving and estimating
- claims payments
- recoveries
It is important for an insurers IT system to be able to deal with…
peaks in demand
What factors can effect to complexity of claims
- communication between insurer and insured and any other professionals involved
- more co-insurers => more complex
- brokers involved => they take care of some documentation
- reinsurance => details of claims need to be passed on
- fraudulent claims require investigation
A claims system needs to be capable of
- processing large amount of data
- processing it quickly
- processing it accurately
- delivering information in a meaningful manner
A powerful, flexible and adaptable claims system is not…
a substitute for experience people
What will effect the type of claims management system a company chooses?
- the structure of the company
- the type of business written
- management decisions about the extent to which their computer systems should be developed
Typical information recorded during a claim, aside from the class of business
- policyholder name
- policy number and claims reference
- details of the claim, inc dates
- contacts
-payments - reserves
Details recorded at the underwriting stage which will be used during the claims process
- description of the risk
- description of the cover provided
- supporting risk information
- whether there is more than one insurer and if so, the name of the insurer, its share of the risk and respective references
main aims of using IT in claims handling
- reduction in cost of claims admin
- improve the service to the insured
Benefits of using IT in claims handling
- single data entry (streamlines admin)
- Reduce use of paper files (quicker distribution)
- Quicker claims settlement
- electronic authorisation of claims payments (minimises bank fees, more efficient)
- Increase in communication channels (improved customer services and communications)
- Portals and extranet services (self service for customers)
Long term benefits of using IT in claims handling
- customer retention from improved service
- technical assistance for the claims handler (e.g. prompting)
- streamlined admin
- automatic checking for fraud
- automatic payment of loss adjustor fees
Drawbacks of using IT in claims handling systems
- non-standard claims cant be dealt with
- system may be difficult to operate
- adverse cashflow effect (speed up claims payments but not premiums)
- reduction of personal service, flexibility and initiative
- system needs to be maintained
- increase in claims cost (cost of licensing and software)
Who does UK GDPR apply to?
data controllers and processors
What are examples of sensitive personal data
- race
- ethnic origin
- politics
- religion
- trade union membership
= genetics - biometrics
-health - sex life & orientation
What are the 6 data protection principles
- data should be processed lawfully, fairly and transparently
-data should only be collected for specified, explicit and legitimate purposes - data should only be collected for specified purposes
- Data should be adequate, relevant & limited
- data should be accurate and up to date
- data should not be kept longer than necessary
- There should be adequate security & protection
What are the 6 lawful bases for processing data?
- Consent (must opt in)
- processing is necessary for a contract
- processing is necessary to comply with the law
- processing is necessary to protect an individual
- processing is necessary for public interest & for a firm to fulfil its function
- processing is necessary for the legitimate interest of the firm
rights for individuals under GDPR
- right to be informed
- right of access
- right to rectification
- right to erasure
- right to restrict processing
- right to data portability
- right to object
- rights in relation to automated decision making and profiling
Data protection act 2018
- ensuring sensitive data can be processed confidentially
- restricting rights to access and delete data where there are legitimate grounds for doing so
- setting the age from which parental consent is not needed to process data online
- proving the ICO with enhanced powers to regulate and enforce data protection law
What are the two customers of an IT system
- the insurance company itself
- the general public who are customers of the insurance company
Ultimate customer
the insured
Organisational Structure
a structure of the company which will allow the company to meet its stated business objectives in an efficient manner e.g. functional or divisional structures