Introduction to Claims Management

Introduction to Claims Management

1. How do corporate mission statements affect claims department operations

   • Mission Statements talk about what a company is about & likely includes the following:
     • Values
     • Core Values
     • Culture
     • Insurers define themselves by a promise of indemnity to the insured
       • delivering on claim payments is accomplished in a way that preserves the following for an insurer:
         • Reputation
         • Integrity
         • Ability to sustain business
     • Words Inspire certain feelings or attidudes
       • Expression of values changes of time
         • influenced by
           • Market environment
           • individual management styles
           • society's idea about what kind of conduct is desirable

2. Corporate Strategies & Goals are harmonised

   • corporate, departmental, unit and individual goals to be formulated and harmonised
     • once goals are formalised, they are shared with members of the organisation
   • Utmost good faith is the benchmark
     • Honesty, fairness, integrity, respect for the insured
       • Courts have said the insurer is in a position of power over the insured during a loss.
         • Insureds can sue, alleging bad faith
           • Harsh, vindictive,High Handed, Oppressive, Malicious
   • Hours of operation are influenced by market conditions
   • Data Management must comply with
     • government regulations
     • reinsurance reporting requirements
     • external financial rating agency needs
     • internal needs to track financial status
   • File retention
     • according to government regs
     • Privacy Laws
   • Budgeting & Expense Considerations
     • Claims handling is subject to a budget
     • Standards for costing are measured against
       • Number of policies in force
       • Geographical area involved
       • type of coverage sold
     • Anticipated Corporate Changes affect budgets
       • if aggressive growth plans are in effect, the budget should be altered
         • budgets should consider
           • anticipated rise in claims frequency
           • locations at which claims are happening
           • jurisdictional issues
           • legislative changes
           • other relevant info
           • Use of IAs?
             • more claims = more need for claims staff
               • re claims handled in house or outsourced to IAs?

3. For successful strategies, goals must demonstrate the following

   • be specific
   • be challenging
   • be measurable
   • but they should also be flexible and serve as guidelines
     • flexibility equates to:
       • allowing room for interpretation
       • attainability
       • results can be measured sensibly & judiciously

4. Performance evaluation methods

   • Claims management reports

5. Role of the Claims Manager

   • Analysing strengths & weaknesses of the claims department
     • overseeing claims functions
   • Inspiring staff to perform well
   • resolving conflicts
   • depends on size & focus of company
   • prepares for anticipated claims
   • Understands the company's growth strategy
   • Hiring Claims Staff is influenced by
     • Book of business
     • Type of claims anticipated
     • number of claims anticipate
     • level of customer service
   • Staffing issues - claims handled in house or outsourced to IAs?
   • Litigation Management
   • delivery of learning
     • different approaches to learning
       • learn by doing
       • self paced learning
       • interactive e-learning
       • coaching & mentoring
       • Classroom instruction
       • case study approach
     • Cost, convenience & effectiveness must be considered
   • Rewards & Incentives
     • encourages employees to take on challenge of improving their skills
     • paying for seminars
     • award bonus
     • recognition programme
   • Motivation Factors
     • job satisfaction increase
     • promotion
     • increase competency

6. Claims Department Structures can be

   • centralised
   • decentralised
   • hybrid

7. Management structures can be

   • Heirarchical
   • Flat

8. Contractual & Regulatory Compliance

   • laws affect payment deadlines & education standards
   • Privacy Law compliance
   • Licensing requirements
     • Provincial gov. imposes lic. requirements for IAs and in QB, staffers too need licensing
   • Monitoring systems
   • Government compliance Audits
   • Reinsurance Treaties
     • Contracts specify claims involvement
       • reporting requirements or control in decisions
     • cut off dates to be complied with
     • re-insurer may offer claims expertise per the agreement