Insurance Claims - Term Paper Example

Today, the firms that operate in the insurance industry have to face an important challenge: the increase of claims is combined with the limitation of demand for insurance contracts; this phenomenon is probably related to the strong financial pressures in markets worldwide. This paper focuses on the claims settlement process. Emphasis is given to the recent advances that have resulted to the increase of efficiency of the claims settlement process. It is proved that claims settlement process can be quite long, especially if the level of compensation involved is high.

Still, the advances developed in regard to this process have contributed in the limitation of failures and delays in completing the claims settlement process. In any case, the role of these advances in the increase of efficiency of the claims settlement process is not standardized; local regulations and social ethics can affect the performance of the process even when supportive schemes and means of technology are available. 2. Increase of efficiency of the claims settlement process – recent advances In the past the potentials of insurance to cover the needs of people worldwide were limited.

Today, almost most of human activities and almost all types of properties can be secured through an insurance contract (Feetham 2012). In addition, the means used for accessing an insurance contract have been developed (Seltzer & Ochs 2010). . The claims settlement process, which is a critical part of an insurance contract, has been also changed being in order to respond to the current style of life, as being affected by the advances of technology (Kearney 2010). The high level of failures related to the claims settlement process and the radical increase of sums which insurance companies worldwide are asked to pay as compensation in regard to insurance contracts have been also led to the need for the advances in all phases of the insurance process (Kearney 2010).

The key advances in the claims settlement process are related to the technology involved in the various parts of the process (Kearney 2010). Due to its structure the process is highly depended on technology (Kearney 2010); for example: an appropriately customized and rapid IT system is required for introducing the information related to an insurance contract (Kearney 2010). The information described above will be of high value in the claims settlement process (Kearney 2010). Therefore, the IT systems in which the data of insured is stored need to be continuously updated and checked as of their performance (Kearney 2010).

In practice, it has been proved that using advanced IT systems can significantly reduce the time required for the completion of the claims settlement process (Feetham 2012). The last year the average time of completion of the above process has been estimated to 12 – months, an achievement related mostly to the use in the process of IT systems based on advanced technology (Feetham 2012). Two have been found to be the parts of the process that are highly depended on technology: ‘a) the retrieval of information in regard to an insurance contract/ claims file and b) the update of a claims