What is the primary objective of the claims handling process?

The primary objective of the claims handling process is to ensure that claims are settled fairly. This involves evaluating the validity of the claim, determining the appropriate compensation based on the policy terms, and making sure that the claimant receives what they are entitled to under their insurance policy. Fair settlement is essential for maintaining trust and confidence in the insurance system, ensuring that policyholders feel secure in their coverage and that their claims will be treated with integrity and respect.

Settling claims fairly helps to uphold the insurer’s reputation and avoids disputes that could arise from perceived unfairness. This approach also fosters customer satisfaction, as clients are more likely to feel valued and supported by their insurer when claims are handled justly.

While minimizing costs, increasing profitability, and denying fraudulent claims are important aspects of an insurer's broader operational strategy, none of these can truly succeed without a fair claims process in place. If claims are not settled fairly, it could lead to negative consequences for both insurers and policyholders, such as decreased customer loyalty or an increase in disputes and litigation. Therefore, the fairness of the claims handling process is foundational to the overall health and sustainability of the insurance business.