Assignment 1
You are the newly appointed Claims Director for a major third- party administrator (TPA). The TPA’s business includes the handling of commercial motor fleet claims for various insurers.
Recently the TPA was involved in the successful prosecution of a former employee who had conducted multiple workplace claims frauds on the motor fleet account. The employee misappropriated total funds of £350,000.
The employee worked in a regional branch as a claims negotiator and had claims payment authority of £5,000. Payment above the employee’s £5,000 limit required authorisation by a team leader.
The employee had manipulated the claims process by:
• Adding non- existent third -party claimants to genuine claims
• Creating false vehicle hire claims.
• Creating fictitious claims on recently lapsed policies.
• Submitting forged documents.
• Adding false information to computer systems.
• Authorising payment over their £ 5,000 limit by using the log- in details of the team leader.
• Directing settlement payment to friends who then transferred the money into the employee’s bank account.
The board has asked you to review the strategic consequences of the employee fraud and recommend claims process improvements.
Question
• Identify, with justification, four significant strategic consequences for the TPA arising from the employee fraud.
• Explain an appropriate response for each of the strategic consequences.
• Recommend, based on your explanation, appropriate improvements that should be made to the TPA’s claims process.
Assignment 2
You are a divisional head of claims for BV Ltd, a personal lines insurer. You are responsible for the claims division within the high net worth (HNW) household portfolio.BV Ltd specialises in insuring high value homes and contents, which typically include jewellery, watches and artwork. Home and contents covers are insured on an unlimited sum insured basis.
BV Ltd is recognised as providing a market leading claims service, based on a personalised and tailored approach for HNW customers. This claims service includes:
• A dedicated expert claims handler appointed to each loss.
• A professional and sensitive approach to claims handling.
• Face- to face assessment of claims.
• Access to a panel of rigorously selected and trusted service providers.
• Speed, efficiency and care for every claim.
Due to the competitive environment, BV Ltd is keen to embrace digital automation. The board has asked you to review whether digital automation of claims handling is appropriate for HNW customers.
Question
• Explain briefly why BV Ltd provides a personalised and tailored approach for HNW customers.
• Discuss two significant advantages and two significant disadvantages of digital automation of claims handling for the HNW customers of BV Ltd.
• Recommend, based on your discussion, the extent to which digital automation of claims handling for HNW customers could be successfully adopted by BV Ltd.
Assignment 3
You are the Claims Directors for DNX Ltd, managing general agent (MGA). DNX Ltd operates in a highly competitive market place, with a portfolio of mid-sized enterprises. DNX Ltd underwrites numerous commercial property and liability products, for which it provides claims handling services.
In recent years, assisted by a good customer retention rates, DNX Ltd has grown appreciably to its current gross written premium (GWP)of £15 million. DNX Ltd expects to continue to grow at a similar rate for the next few years.
To win new business, the underwriters of DNX Ltd have focused on meeting customers demands and competing on price. One of the consequences of meeting customers demands is that DNX Ltd has accepted, without challenge, the claims service providers in place on the business it has won.
Currently, DNX Ltd uses 85 different claims service providers, which comprise lawyers and loss adjusters. Some of these claims services providers with operate with delegated authority. DNX Ltd.’s legal and compliance team, which also handles procurement, consists of two full-two employees.
You have identified the need for a claims service providers strategy to support DNX Ltd.’s requirements.
Question
• Explain four significant strategic consequences for DNX Ltd of having a large number of claims service providers.
• Devise, based on your explanation, an appropriate claims service providers strategy for DNX Ltd.
• Recommend how you will implement the claims service providers strategy you have devised.