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IF4 > Chapter 5 > Flashcards

Chapter 5 Flashcards

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1
Q

Need IT be concerned with company claims philosophy?

A

Yes, any IT process should be designed with the companies philosophy in mind.

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2
Q

What are positives of using IT in claims handling for insurers?

A
  • Faster and more efficient handling of data
  • Better able to respond to insured’s demands and expectations
  • Automated payments makes the process quicker
  • Less room for human error
  • Fraud detection
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3
Q

What is the ‘raw material’ in IT?

A

The data

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4
Q

What are the 2 main things an IT system needs to be capable of doing in claims handling?

A
  1. Processing large amounts of data accurately and quickly
  2. Delivering the data in a meaningful way
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5
Q

What type of information is typically recorded on IT systems for claims?

A

The name of the policyholder,
The policy number,
Details of the claim,
Contacts,
Payments,
Reserves

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6
Q

What are the 2 main AIMS of using in IT in claims handling?

A
  1. Reduce costs of claim admin
  2. Improve services for the insured
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7
Q

What are 6 MAIN benefits of using IT for claims handling?

A
  1. Single data entry (reduces risk of duplicate claims/errors)
  2. Reduces the use of paper files
  3. Quicker claims settlement
  4. Quicker claims payment due to electronically authorised processes
  5. Increase in communication channels
  6. Portals allow the customer to self serve and get updates on the progress of their claim
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8
Q

What are some less tangible benefits of IT in claims handling?

A

More customers retained, allocation of appointments, automatic checking for fraud, automated payment of LA fees

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9
Q

What are 7 difficulties of using IT in the claims handling process?

A
  1. Complex claims may not fit within the framework
  2. Increased claims costs
  3. Not much flexibility
  4. Adverse cash flow effect (claims are paid quickly but premiums are not)
  5. Personal service to the insured may be reduced
  6. The system needs to be updated and maintained which is expensive
  7. Productivity may increase - causing contained costs.
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10
Q

From what age do you no longer need your parents permission to process your data online?

A

13

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11
Q

What is personal data?

A

Data that can be used to identify a living human being.

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12
Q

What is sensitive personal data?

A

A special category of personal data that has extra safeguards

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13
Q

Name some special categories of data?

A

Race, genetic data, sexual orientation, health, biometrics, political opinion, religious or philosophical opinion

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14
Q

What are the 7 data protection principles?

A
  1. Lawfulness, fairness and transparency
  2. Purpose Limitation
  3. Data minimisation
  4. Accuracy
  5. Storage limitation
  6. Confidentiality
  7. Accountability
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15
Q

What is an example of poor storage limitation?

A

Holding onto a file for 8 years

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16
Q

What is an example of poor data minimisation?

A

Do you need to record someone’s date or birth or middle name?

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17
Q

If someone ticks a box about their personal data, does that count as consent?

A

No

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18
Q

What are 6 lawful reasons to store data?

A
  1. Consent
  2. Contract
  3. Legal Obligation
  4. Vital Interest
  5. Public Task
  6. Legitimate interest
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19
Q

What does having a legitimate interest for holding personal data mean?

A

A good commercial reason

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20
Q

What 8 rights do people have over their data?

A
  1. The right to erasure
  2. The right to be informed
  3. The right of access
  4. The right of rectification
  5. The right to restrict processing
  6. The right to data portability
  7. The right to object
  8. The right to reject automated decision making
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21
Q

Is GDPR transferred abroad?

A

Yes

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22
Q

If there is a breach in GDPR who do firms need to report it to?

A

Information Commissioner’s Office (ICO)

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23
Q

What is the maximum fines the ICO can levy?

Study These Flashcards
A

£17.5 million or 4% of annual global turnover if higher.

24
Q

Who is the ultimate customer of IT claims systems?

25
Should authority levels be taken into account in claims handling systems?
Yes
26
Who has the most influence over the design of the claims system - the policy holder or the insurer?
The policyholder
27
Name 5 ways AI is being used to help the claims process.
1. Automation and efficiency when it comes to data entry and assessment 2. Fraud Detection 3. Chatbots 4. Image/Damage assessment 5. Personalised Experience
28
In what way can AI triage claims?
It can flag suspicious claims for human review
29
What is a functional structure of a company?
The traditional form of an insurance company structure - typical in small/mid-sized insurance companies. Each department focuses on one specific function across all products and regions.
30
What are 2 advantages of a functional structure?
1. Employees can specialise in their type of work 2. Larger units may be more cost effective
31
What are 2 disadvantages of functional structure?
1. Inflexibility as people tend to see their role as just one thing 2. Difficult to co-ordinate different functions as there may be a lack of common interest between the different functions.
32
What is a divisional structure and what type of companies have this structure?
It's organised by geographical area and each division is partly autonomous with their own subsets of marketing, production etc... Large, multi-national co-operations like Aviva.
33
What are centralised organisations?
Organisations that retain authority at the top
34
What are decentralised organisations?
There is more delegation with regional managers making more decisions
35
Will large claims still have to be reported upwards in decentralised organisations?
Yes as there is normally a delegated authority limit for each branch.
36
What are 2 advantages of centralised claim settlement methods?
1. The required level of expertise is available 2. Accessing records is easier
37
What are 2 disadvantages of centralised claim settlement methods?
1. There may be a lack of contact between policyholders and local staff 2. There may be delays due to claims having to be referred and waiting on head office
38
What does outsourcing mean in a claims context?
Using skilled resource from outside the company to handle work traditionally performed by staff.
39
Why do insurers outsource?
1. Cost benefits e.g., outsourcing to India where labour costs are cheaper 2. To manage surge events 3. To gain access to a wider skill base
40
What is off-shoring or near shoring?
Insurers placing their call centres out of the UK to cut costs
41
Why was off-shoring increasingly rejected?
Language and service issues arose - as well as questions about exploitation
42
Name some 3rd parties can claims be outsourced to.
Third party administrators Brokers Loss Adjusters
43
What are some advantages of outsourcing?
Cost savings, wider skill base, helps with work surges, insurers can concentrate on core activities
44
What are some disadvantages of outsourcing?
Loss of control over claims, dependence on provider, your insured could have a poor service experience, lack of in-house expertise, unforeseen costs
45
Who pays Loss Adjusters?
The insurer who instructs them
46
What are loss adjusters?
Loss adjusters are professionals who investigate and negotiate claims for the insurer. They will recommend the amount payable and look into if the loss event is covered under the policy.
47
What is a disaster recovery company?
A disaster recovery company specialises in ensuring and advising on business continuity in the event of an interruption.
48
What is a surveyor?
A surveyor will prepare the report of a risk. They will report on compliance and conditions or warranties.
49
What is a MPL?
Maximum Probable Loss - what they consider to be the most that could be lost of a loss took place
50
What are loss assessors and who pays for them?
They are appointed and paid for by the insured and help negotiate the claim on the insured's behalf.
51
Are loss assessor fees taken as part of the quantum?
No
52
What is an advantage for authorised repairs of being connected to an insurer?
Guaranteed Work
53
What is a salvage company?
Salvage companies help insurers buy, recover, manage, and sell damaged or written-off goods, vehicles, or property from insurance claims.
54
What are 'green parts'?
Refurbished car parts that can be used in repairs
55
Who are risk managers used by and what is their purpose?
The policyholder - they find ways to reduce the likelihood of an insurance claim and can help to reduce the premium if their methods are implemented.
56
What methods might a risk manager suggest using?
Installing new equipment or new safety protocols,
57
Name some experts used in the valuation of third party claims?
Care experts, Medical Experts, Life Expectancy Experts, Accountants, Surveillance, Accommodation Experts.

IF4 (7 decks)

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