Page 51 - CFPA-SCR-Award in General Insurance W01_2018-19_Neat

Chapter 2 The insurance market 2/13

An underwriter may be:
• a Lloyd’s underwriter, who accepts the whole or part of a risk offered on behalf of Lloyd’s members
and receives a portion of the premium paid in return for agreeing to meet that proportion of each loss;
• a person employed by an insurance company, whose job it is to make decisions on acceptance and Chapter
premiums and apply the company standards; or
• a term used to describe an insurance company itself, fulfilling the role of an underwriter because it 2
accepts risks.

I2 Claims personnel
An efficient claims department, staffed by competent and professional claims personnel, is vital to
ensure the proper management of an insurance company’s funds. The role of claims personnel is to:
• deal quickly and fairly with all claims submitted;
• distinguish between real and fraudulent claims;
• assess the cost of a claim so that a realistic value is placed upon it prior to payment (this is the
process called reserving);
• determine whether others, such as loss adjusters, need to be involved; and
• settle claims with the minimum of expenses.

I3 Loss adjusters

A loss adjuster is an expert in processing claims from start to finish. Straightforward small claims are
usually negotiated and settled by in-house claims staff. However, in the case of larger claims or complex
policy wordings, the services of a loss adjuster will be used. Their functions are:
• investigating of the circumstances surrounding a claim;
• determining whether and to what extent the policy covers the loss;
• facilitating any emergency measures, e.g. for the protection of property;
• negotiating amounts claimed;
• negotiating with any specialist suppliers; and
• making a recommendation for settlement to the insurer.
The insurer will then consider the amount and, if satisfied, offer this sum to the policyholder.
Their aim is to negotiate a settlement, within the terms of the policy, which is fair to both the insurer and
the customer. Chartered loss adjusters in the UK are members of the Chartered Institute of Loss
Adjusters (CILA) and act independently, which usually means their fees are met by the insurers who
instruct them.

I4 Loss assessors

Loss assessors present themselves as experts in dealing with insurance claims. They are appointed, and
paid for, by the customer to prepare and negotiate a claim on their behalf. The fees paid don’t form part
of the claim and cannot be recovered from the insurer.
Consider this…
Make sure you are clear about the differences between the role of loss adjuster and loss assessor.

I5 Actuaries

An actuary may be defined as a qualified person who applies probability and statistical theory to
problems of insurance, investment, financial and risk management, and demography.
Actuaries have for many years been associated with life insurance companies, applying mortality
statistics and time value of money techniques to determine pricing, the adequacy of funds to meet future
liabilities and solvency requirements. They are also employed by general insurance companies.
Techniques applied by actuaries will include the probability of loss and the prediction of claim numbers
and future values.