MG616: You will apply the techniques learned in the course to a business process for handling insurance claims for disability: Improving Business Processes Case Study, NUI, Ireland

Case Study

In this project, you will apply the techniques learned in the course to a business process for handling insurance claims for disability insurance at an insurance a company called InsureIT.

The process starts when a customer lodges a disability claim. To do so, the customer fills in a form including a 2-page questionnaire describing the disability. The customer can submit the form physically at one of the branches of InsureIT, by postal mail, fax, or simply via e-mail.

When a claim is received, a junior claims officer enters the claim details into the insurance information system. Data entry usually takes 10 minutes. The same junior claims officer performs a basic check to ensure that the customer’s insurance policy is valid and that the type of claim is covered by the insurance policy. It is rare for the claim to be rejected at this stage. Next, the claim is moved to a senior claims officer who performs an in-depth assessment of the reported disability and estimates the monthly benefit entitlement, i.e. how much monthly compensation is the claimant entitled to, and for what period of time?

In the case of short-term disability benefits, the senior claims handler can perform the benefit assessment without requiring further documentation. In these cases, the benefit assessment takes 20 minutes on average. Once a decision is made, the senior claims handler registers the entitlement on the insurance information system and informs the customer of the outcome via e-mail or postal mail.

However, in the case of long-term disability claims (more than three months), the senior claims handler requires a full medical report in order to assess the benefit entitlements. Senior claims handlers perceive that these medical reports are essential in order to assess the claims accurately and to avoid fraud. Once the senior claims handler has received the medical report, they can assess the benefits in about one hour on average. The senior claims handler then sends a response letter to the customer (by e-mail and post) to notify the customer of their monthly entitlement and the
conditions of this entitlement, e.g. when will the entitlement be stopped or when is it due for renewal? The entitlement is recorded in the insurance information system.

Later, a finance officer triggers the first entitlement payment manually and schedules the monthly entitlement for subsequent months. The finance officer takes on average 20 minutes to handle an entitlement. Finance officers handle payments in batches, once per working day.