Talking about Claim

I have a great discussion with the HOD of life claim department this afternoon, and I have learned plenty of things. I always like to talk to the HOD of claim department (either in the previous company or current company I work), as he/she shares a lot of real life examples which make make me know better how insurance works in reality, and the problems and challenges he/she faces in managing insurance/takaful claims.

Actually, the main purpose I had the discussion with the HOD was to understand how the claim process is carried, so that later the system development team starts working on the claim module enhancement, the problems the claim assessors facing now (that related to system) can be resolved together. Well, I am glad that he shared some real life cases with me during the discussion, helping me to understand better how he & his staffs assessed claims.

I always agree that claim department is an important “gatekeeper” of insurance/takaful companies, apart from the underwriting department. Theoretically, claim assessor should only pay claims if the disabilities/events meet the definition in the contract and he should reject the claim if otherwise – unfortunately, this is too ideal in practical. Although some claims do not meet the definition stated in the contract, the customer may complain to some body/regulator or take legal action towards insurance/takaful companies, which eventually the insurance/takaful companies have to pay the claims which are initially rejected.

The reason we have contracts for insurance/takaful contracts because we want to properly draw up the exposure under a certain products, so that we can set the premium rates accordingly – if an insurance/takaful is very “lenient” in paying the claims (i.e. still pay claims even though the disability/event doesn’t really meet the definition stated in the contract), eventually the victims are the policyholders – they will have to pay a high premiums to cater for high claims. Insurance/takaful companies are not welfare bodies and they definitely will not charge low premiums for high claims.

If you find out an insurance/takaful company accepts risks easily and pay claims generously, and you are actually a healthy life, I would urge you to think twice if you intend to purchase a policy from that company… Remember you are the one who pay claims.