Page 160 - Risk Management in current scenario

Underwriting and Claim Mana-gement
The underwriting is a process of selection of lives so that the standard
lives thus selected follow the mortality pricing assumption. As the higher
age and higher sum assured present the higher risk to the insurance
company, they want to ensure that they are selecting the standard lives
and those with sub-standard lives are charged with higher premium. The
health status is determined by asking the health questions and looking
at the past health report of the customers by a qualified doctors/ health
centers.

Claim Management

At the time of reporting the death, insurance company ask for various
document such as cause of death, death certificate, if death is from
certain disease, then ask for details of the disease and treatment taken,
hospital records so that the right cause can be identified and also verify
the information given at the proposal. If the information given at the time
of proposal is found to be incorrect at the time of claims and there is a
linkage of misrepresentation of information found at the time claim, the
insurance company has a right to refuse paying the claim. This is because,
the insurance is a contract with the policyholder based on utmost good
faith where both the insurer and insured will disclose all the information
at the time of taking insurance.

The claim management is a last set of tool used by the insurance company
in managing the mortality risk.

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158 | Risk Management in Current Scenario