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Nov 2019

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Asia: Are tighter rules around claims needed?

Source: Asia Insurance Review | Oct 2019

A report from the China Banking and Insurance Regulatory Commission (CBIRC) revealed that it had registered a total of 48,194 complaints against insurers in the first half of the year.
 
Most of the complaints were regarding insurance claims and sales of insurance products, said the report. 46,911 of the cases involved contract disputes, which increased by 0.03% year-on-year. Suspected violations of insurance laws and regulations in the first half amounted to 1,283 cases, or 27.8% higher than the same period last year.
 
The two most important interactions between the insurer and the consumer is during purchase of the policy and the payment of claims. With the rise in intensity and frequency of extreme weather events in the region, insurers must be ready to make claims payments in volume, on very short notice if they are to maintain the trust of their policyholders.
 
In the US, 18000 claims from 2018’s Hurricane Michael are still unpaid, with many insurers exploiting loopholes within regulations to delay payments. According to a report by the Miami Herald, “By law, insurance companies are supposed to pay claims within 90 days.
 
“But that requirement has so many loopholes that it’s almost meaningless. The three-month time span only applies after a claim is made, the insurer settles on how much is owed and then the homeowner agrees to that amount. The law allows insurance companies to take months to provide an estimate.”
 
Although the industry exploring technology-based solutions, such as AI and blockchain to improve and automate their claims processes, the question still remains as to whether the notoriously slow-moving industry will be able to keep up with the rate of claims.
 
Asia Insurance Review’s Claims Summit this year with the International Federation of Adjusting Associations involved will directly tackle these issues as well as have special local, regional and international panels to up the ante for claims professionals. The image of insurance lives and dies by its claims track record. A 
 
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