Insurance claim settlement is one of the vital part of the insurance business. Policyholders purchase an insurance policy in order to receive financial benefits or ensure the savings for his/her beneficiary when he/she will be in danger or risk of losing life or financial constraint. An insurance company can fulfill the commitment that was made with policyholders while selling insurance policy if they can settle the claims timely in a systematic manner. Policyholders will be happy & their trust can easily be gained if the claims are settled with care within a standard timeline. Therefore, claim settlement is a key to making the policyholder happy which can easily be made if the structural claim settlement policy is applied. Therefore, through this paper, structural claim settlement process will be explained which will be helpful to earn the trust of policyholders.
Key words:
Claim settlement, Insurance,Business, Commitment, Policyholder, Insurance Policy, Financial benefits, Beneficiary, Risk, Trust.
1. Introduction:
Insurance means some kinds of protection. Insurance is a means of protecting you and your family from the risk or loss. Professor M.N. Mishra described, “Insurance is a co-operative device to spread the loss caused by a particular risk over a number of people, who are exposed to it and who agree to insure themselves against the risk”.Mowbray & Blanchard explained, “Insurance is a promise by an insurer to an insured of protection and or service”. To receive insurance benefits in the unexpected event of death or accident insurance coverage amount is considered which comes to affect when the contract between the insurance agent and the policy owner takes place. An insurance contracts can be for 10, 12, 15 or a 20 year. During this tenor, the concerned insurance Company is obligated to provide excellent policyholder service such as policyholder queries regarding his or her policy status (premium rates, policy surrender, reinstatement of policies)when the situation warrants. The whole idea is to create an excellent relationship between insured and insurer. This principal should be linked with practice. In this connection, resolving claims issue as and when occurred is one of the core functions of the insurance company. Claims can easily be handled&policyholder trust can easily be achieved if a structural claim settlement process is applied from the notification of claims to disbursement.
2. Insurance Claim:
A claim is insurer’s fulfillment or financial obligation to its client or beneficiary in the event of death, total or partial disability such as death benefit and health benefit like total or partial disability.An insurance claimscan be described as the formal request of policyholder or nominee to an insurance company to pay the committed coverage amount that arises under the policy. Early claim settlement will provide following benefits to the company:
o Enhances Company’s goodwill
o Builds up policyholder’s confidence level
o Increases Company’s business growth which further increases the financial solvency ratio
o Company’s employees are benefited resulting from positive business growth
o More employment created resulting from Company’s business expansion
o More business means more taxes to the government – which can help finance larger projects leading to social welfare
o Financial strength of the Company means – it can roll its fund for higher profits like investment in bonds and share markets, government securities
o With adequate financial strength, Company will have the opportunity to fine tune its existing infrastructure in a manner to provide upgraded services to clients
o Company can focus on branding to enhance its image and also promote its product lineups
o Long standing employment in the Company may entitle the employees to enjoy benefits for their children like free education and scholarships
3. Structural Claim Settlement Process:
Settlement of insurance claims involves a series of activities which are carried out one after another to settle chock-a-block the claims and make the policyholder happy. A structural claim settlement process will be helpful to achieve the goal of company and which will surely help earning the trust of policyholders or beneficiaries.

Fig. 1 Claim Settlement Process
3.1 Claim Notification:
Claim settlement process blooms from the day when policyholders notify the claim or make the formal request to an insurance company to settle the claim. While selling an insurance policy, an insurance company needs to clearly mention the claim notification process so that policyholder can easily notify the claims as soon as the incident occurs. To make the claim notification process easy and smooth multiple claim notification system can be introduced. This will be helpful for a policyholder to notify the claims and get a quick settlement from the company.

Fig. 2 Shows the various mode of Claim Notification
3.1.1 Sending SMS for Claim Notification: To receive quick claim notification, company can develop the tools so that policyholder can notify the claims via sending SMS to claims team. This process will be hassle free for policyholder to notify the claim & also it will be helpful for the company to record the notification instantly and starting the next step to settle the claims.
3.1.2 Calling policyholder Service hotline: Policyholder service hotline can be another tool by which policyholders can notify their claims. Moreover, this will make the settlement process faster because when policyholders will call to hotline then agents will be able to guide the beneficiary about the required documents and provide front line claims service. So, to fulfill the commitment of quick claim Settlement Company can introduce a dedicated hotline to provide service to the policyholders to get claim notification and answering the policyholder’s query.
3.1.3 Sending E-mail to Claims Team: Modern technology has improved a lot that tools can be used in insurance industry. For instance, an insurance company can open a common email address and that can be circulated to policyholders so that anyone can notify the claims via sending emails.
3.1.4 Sending Letter to Claims Team: This tool can also be used used as a weapon for the rural
policyholders who has less access in modern technology to receive claims notification.
3.1.5 Sending Fax to Claims Team: This tool can also be used targeting the rural policyholders who has less access in modern technology to receive claims notification.
3.1.6 Visiting nearest Local Office: To receive quick claim notification, the company need to develop a process so that policyholders can notify the claims by vising any local office of the company.

3.2 Claim Handling & Management:
Professionally handling of each claim are crucial to make policyholder happy and earn their trust. Each claim & claimant needs to be handled separately with the full dedication and care so that policyholders can feel better and relive from the sorrows and sufferings which occurred due to the expected events. In order to do that, notified claims have to be recorded in Claim sheet/Claim log or internal claim management software for quick follow up & settlement. Claim processor should communicate with beneficiary as soon as they receive the notification. The ultimate goal of claim processor is to guide the beneficiary about the requirements of the claim documentations so that policyholders can understand exactly what the documents they need to be followed for getting claims payment. Claim process needs to follow with claimants until they receive the full documentation.
3.3 Claim Documentation:
To settle the claim timely we need to mention decisively what are the documents require for the settlement of the claims. The insurance company must do analysis locally about the documentation that is easily available in the country. They should not make any document mandatory which policyholder’s faces difficulties to obtain from the local authority. Claim processor should assist policyholders to collect the documents if policyholders meet any difficulty. Claim processor can share a file of mandatory documents with a view to making those easier for policyholder understanding.

Natural death:
o Death certificate of Insured
o Valid National Identification card of policy holder
o Valid National Identification of beneficiary
o Relationship Status Certificate: Birth certificate/Marriage certificate or local counselor affidavit
o Bank Account Number of beneficiary: deposit slip/ blank cheque book cop

Un-natural death:
o Medical report
o Copy of Post Mortem
o Copy if FIR
o Final Police Report
3.4. Claim Verification:
Claim verification is the most vital part to identify the genuine policyholders. It helps provide the insurance benefits to genuine beneficiary for the plan. Even, it is very helpful to identify the fraud claims and tracking those frauds before the payment. If verification can be done quickly then, settlement process can be completed within the standard timeline. Whole claim verification process can be divided into following parts:
Fig. 3 Claim Verification Process
Step 1: Claimant Verification:
The claimprocess can verify the claims by conducting an interviewer with the claimant. This interview can be via phone if the claimant location becomes far away from claim team. In the interview the claim process can ask some specific questions regarding the incident and about the policyholders. This interview will help make a quick decision whether to pay the claims or reject the claims.
Step 2: Policy verification:
In policy verification helps determine the coverage amount and others details of the claimant and beneficiary. Claim processor can match the interview finding with policy information. If everything seems correct then, claim processor can make the decision.
Step 3: Document Verification:
This is the most important part of entire verification system. Claim processor can match the submitted documents with standard documents template to verify. Moreover, claims processor can also verify the documents by taking the help of online or taking with issuing authority of the documents. If the claim processor is still not happy with the mentioned process then they, can arrange a field verification to ascertain more details about the claimant and documentation.
Step 4: Field verification:
To verify the claim, insurance company can also arrange field force to collect more details. During filed verification, they can collect evidence and take the final decision.Insurance Company should develop a claim verification team who will verify the claim in shortest possible time so that claims can be settled quickly. However, I believe all claims do not require field verification.
3.5 Insurer Approval/ Internal Approval System:
To settle each claim timely a standard TAT-Turnaround Time needs to be fixed.Internal Claim Approval process need to be easy & simple so that can claim cheque can be issued within the shortest possible time. Moreover, to better monitoring systems a claim status can be put to send for internal approval.
3.6 Claim Payment:
Timely claim payment are the ultimate goal for insurance business. In order to settle the claims following things can be performed.
” Assisting the claimant to open Bank account
” Issuing the cheque in favor of policyholder/beneficiary bank account
“Requesting the policyholder/ beneficiary to collect the cheque
” Asking policyholder/ beneficiary to share their opinion how they want to collect cheque
” Assisting the claimant to deposit the cheque
The writer is an adjunct faculty member of MBA Program of International University of Business Agriculture and Technology , Uttara, Dhaka. E-mail: [email protected]