For insurance companies to succeed, claims management effectively is essential. Their margins are affected directly via a lower or higher loss ratio. To control leakage of claims, it is significant to control the costs of claims.<\/p>\n
Simply put, leakage of claims covers amounts that are paid against claims that could have been avoided.<\/p>\n
Give below are a few examples:<\/strong><\/p>\n – Paying for losses that the policy did not cover, such as not making deductions that were due and paying more than the amount due.<\/p>\n – Paying without investigating properly and not removing or reducing the loss cost.<\/p>\n Typical claims in motor insurance concern one of these:<\/strong><\/p>\n – The insured vehicle getting damaged accidentally<\/p>\n – When another vehicle is involved, a claim involving a third party<\/p>\n In the former case, leakage of claims could be on account of reasons such as:<\/strong><\/p>\n – Not deducting the amount due or paying more than necessary<\/p>\n – Not allowing for improvement, e.g., when an old component damaged in an accident is replaced with a new one.<\/p>\n – Not being able to contain costs of repair, e.g., overestimating the damage to be repaired.<\/p>\n In the latter case, leakage of claims is constituted by somewhat more complicated procedures as many parties related to the claims have to be dealt with. The claim\u2019s value or liability may have to be determined through discussions with other companies dealing with insurance.<\/p>\n Partnering with a provider who is a specialist could prove worthy in such a case. While dealing with motor insurance claims, business process outsourcing can prove useful in 3 areas. These are as follows:<\/p>\n