Once more, there are significant differences between Life and General Business
claims. Specifically, the implications include:
(a) Life insurance claims: obviously, there will only be one death claim. It is quite
essential for the claims handler to check each claim with the utmost care, as all
sorts of considerations are involved, such as:
(i) possible disputes or complications, for instance, problems may arise when
the primary beneficiary cannot be traced, or more than one person lodges a
claim as alleged assignees;
(ii) possible outstanding policy loans;
(iii) possible assignment, so that the claimant is not the original policyholder;
(iv) uncertainties over actual death or the identity of the deceased;
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(v) dividend/bonus considerations with participating/with-profit policies.
For similar reasons to those pertaining to underwriting (see 4.5 above), life
insurance claims handling is frequently centralised.
(b) General insurance claims: the range of different types of claims is much wider
than with life insurance. Also, it is quite possible that the amounts involved are
enormous. Therefore, equal care should be taken in verification, although most
claims being relatively small, the work is much more likely to be decentralised,
sometimes with fairly junior staff having some degree of authority in claim
settlement.
[Example: Claims may be relatively trivial, such as the loss of a camera, or
exceedingly complex, such as a major explosion at a large power station.]
(c) Common features: there are two areas that must be the subject of attention in all
insurance claims. These are:
(i) Liability: is the insurer liable under the policy? When dealing with
liability insurance, it must also be ascertained whether the insured is liable
at law to the third party claimant.
(ii) Quantum: how much is payable with the claim? With life insurances, it is
usually pre-determined, but with other classes of business, this could
involve complex and sometimes bitter discussion.
(d) Significance: it has been said that an insurer stands or falls on the way it deals
with its claims. There is truth in the remark and the insurance intermediary will
want to know and feel confidence in the support he looks for in this area.