Student's Declaration: Gage University College

Student’s Declaration
We, the understand, declare that this research paper is our original work, prepared under the
guidance of Garadew Kebede (MBA) All source of materials used for the manuscript have
duly acknowledged.
Name Signature Date
1. Ayelech Gulema ____________________ _________________
2. Demisew H/giorgis ___________________ __________________
3. Getahun Dessie ______________________ _________________
4. Guedity Denboba ______________________ _________________
5. Tirunesh Habte ______________________ __________________
Advisor’s Declaration
Gage University College

The paper has been submitted for examination with my approval as the university college
Advisor
Name _____________________
Signature _____________________
Date __________________
Assessment of Claims Management Practices in Case of
Ethio- life and General Insurance S.C.

Approved by the Board of Examiner
_________________ ______________ ____________
Advisor Signature Date
__________________ _________________ ____________
External Examiner Signature Date
_________________ _____________ _______________
Internal Examiner Signature Date
ACKNOWLEDEMENT
First of all, we would like to thank our God, We are especially in debated to Mr. Garedew
Kebede Department head of Business Management and our Advisor, who have been
supportive of our carrier goal and who worked actively to provide us with the protected
academic time to pursue this goal.

We are grateful to all those with we had to pleasure to work during this research. we would
especially like to thank all members of risk underwriter, clam officer and committee member
of ELiG insurance staff those helped us during our research work whatever we want to
pursue.
Table of contents
page
Student’s Declaration..............................................................................................I
ACKNOWLEDEMENT.......................................................................................IV
Table of contents.....................................................................................................V
LIST OF TABLES................................................................................................IX
ABSTRCT................................................................................................................X
CHAPTER ONE INTRODUCTION.....................................................................1
1.1. Background of the study.....................................................................................................1
1.2 Background of the originations.........................................................................................2
1.3 Statement of the Problem.....................................................................................................3
1.4 Research Questions..............................................................................................................4
1.5 Objectives of the Study........................................................................................................4
1.5.1 General Objective......................................................................................................4
1.5.2 Specific Objectives....................................................................................................4
1.6 Significance of the Study.....................................................................................................5
1.7 Scope of the Study...............................................................................................................5
1.8 Limitation of the Study........................................................................................................5
1.9 Operational Definitions.......................................................................................................6
1.10 organization of the Study...................................................................................................6
CHAPTER TWO REVIEW OF RELATED LITERATURER..........................7
2.1 Overview of Insurance.......................................................................................................7
2.2 General guidelines of Claims Handling...............................................................................8
2.3 Focus area of Claims Handler to Know...............................................................................9
2.4 Claims Management..........................................................................................................13
2.4.1 Quality Claims Handling.........................................................................................24
2.4.2 Claim.......................................................................................................................25
2.5 The claims Process............................................................................................................25
2.6 Customer Oriented Service................................................................................................28
2.6.1 Customer Service....................................................................................................29
2.6.2 Importance of customer’s service............................................................................29
2.6.3 Measure customer satisfaction................................................................................30

2.6.4 Importance of customer satisfaction........................................................................30
2.6.5 Customer satisfaction..............................................................................................30
2.6.6 Customer Retention.................................................................................................31
2.7 Practical Review................................................................................................................32
2.8 Empirical review................................................................................................................36
CHAPTER THREE RESEARCH DESIGN AND METHODS........................37
3.1. Research Design...............................................................................................................37
3.2 Data Types and source.......................................................................................................37
3.3 Target Population...............................................................................................................38
3.4 Sampling Size and Sampling Technique...........................................................................38
3.5 Types of Data Collected....................................................................................................39
3.6. Methods of Data Collection..............................................................................................39
3.7. Data Analysis Method......................................................................................................39
CHAPTER FOUR DATA PRESENTATION and ANALYSIS........................41
4.1 Analysis of Employees Response......................................................................................42
4.1.1General Characteristics of Employee Respondents..................................................42
4.1.2. Claim Management Strategy..................................................................................43
4.1.3 Measure of Customer Satisfaction..........................................................................44
4.1.4. Customer Relationship...........................................................................................45
4.1.5 Claim Management Training...................................................................................46
4.2. Employee Adaptability and Customer Cooperatives........................................................47
4.2.1 Claim Management Challenges...............................................................................48
4.2.2Analysis of Questionnaires Filled by Customers.....................................................50
4.2.3General Characteristics of Customers’ Respondents...............................................50
4.2.4 Analysis of the Findings of Customer Respondent.................................................51
4.3 Claim Settlement Procedure..............................................................................................51
4.3.1 Customers Attitude on Claim Settlement................................................................52
4.4 Information Given by Underwrite on Claims Produces....................................................54
CHAPTER FIVE SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS......................................................................................56
5.1. Summary...........................................................................................................................56

5.2. Conclusions.......................................................................................................................57
5.3 Recommendations..............................................................................................................58
References..............................................................................................................61
APPENDIX I..........................................................................................................63

LIST OF ACRONYMS
ELiG Ethio –life and General insurance S.C
S.C Share company
LIST OF TABLES

Table 4.1 General Characteristics of Employees…………………………………43
Table 4.2 Claims Management Strategies…………………………………………45
Table 4 .3 Measure of Customer Satisfaction………………………………………46
Table 4.4 Customer Relationship ………………………………………………….....46
Table 4.5 Claim Management Training ………………………………………….....47
Table 4.6 Employee Adaptability and Customer Cooperative ……………….49
Table 4.7 Claim Management Challenges………………………………………...50
Table 4.8 Background of Respondents………………………………………….......51
Table 4.9 Claim Settlement Procedure………………………………………………52
Table 4.10 Customers Understanding & Prompt Claim Settlement…………….54
Table 4.11 Information Given by Underwriters on Claim Procedure…………...56

ABSTRCT
This study is on empirical investigation of insurance claims management among selected

insurance in Ethiopia. Ethio-life and general insurance share company (S.C),This research
have been able to review critically the significant contribution on claim management
practice in ELiG by assessing claims handling procedures and process, policy condition
claims management, customer compliance and claims settlements of Ethio- life General
Insurance Company, customer satisfaction. This study conducted ELIG, Addis Ababa main
branch claims department and by descriptive survey research design through interview and
collected questionnaires for employees in claim department and risk underwriters, branch
manager and claim committee members. the finding indicting that lack of modern technology
insufficient information unqualified personal are the basic dissatisfaction employees of
claims settlements. It is recommended to claims manger and higher officials of ELIG to put
forward strategic plan to provide insurance service quality to his customer by improving and
trained his staff and state of the art training mechanisms should put in place to enhance and
improve the working pattern of claim officer which might affect the organizational efficiency
of the ELIG and under in claims handling ELIG give affirmative to equalize the numbers of
girls and boys in the companies giving attention to customer oriented service, customer
satisfaction based on claim settlement as per cover they have and using advance technology
in claim and underwriters to enhance the efficiency of work done and reducing the work
load on employee.
Keywords, Claim settlement, customer Satisfaction and claim Management.
Gage university college X

CHAPTER ONE
INTRODUCTION
1.1. Background of the study
According to (James, 2009),The handling of claims is a key part of an insurer’s business. It is

after all the “promise to pay” which has been purchased by the policy holder. It is that which
is tested when claim is made to the insurer. Therefore, Insurance and Claims cannot be
isolated and let see the view of different authors from Insurance and Claims perspectives.
According to ( Dorfman 2005: 1-2), Insurance is financial arrangement that redistributes the
costs of expected losses. Insurance involves the transfer of potential losses to an insurance
pool. The pool combines all the potential losses and then transfers the cost of the predicted
losses back to those exposed. Thus, insurance involves the transfer of loss exposures to an
insurance pool and the distribution of losses among the members of the pool. An insurance
system redistributes the cost of losses by collecting premium payment from every participant
(insured) in the system. In exchange for the premium payment, the insurer promises to pay
the insured’s claim in the event of a covered loss. From the legal point of view insurance is a
contractual agreement whereby one party agrees to compensate another party for losses.
According to (Teklegiorgis ,2004: 160), one basic purpose of insurance is to provide for the
indemnification of those members of the group who suffers losses. This is accomplished in
the claim settlement process, but it is some time a great deal more complicated than just
passing out money. The payment of losses that have occurred is the function of the claim
department. The nature of difficulties frequently encountered in this field is called ‘adjusters
‘The claim department is the ‘shop window’ of an insurance company. To purchase an
insurance policy is to purchase something intangible. It is simply a promise to pay in an
agreed set of circumstances. Consequently no one knows how good their Policy is until a
claim arises. How the claim is handled will ultimately decide whether the customer is
satisfied with the product they bought or will choose to take their business elsewhere it he
Gage university college 1

future. Consequently the actions of claims handler can have a direct impact on the
profitability of the insurer (James, 2009).
According to (Qaiser, January 2014), Faculty member of Pane National Insurance Academy,
the claims handling is more process oriented, the insurance Companies have too much
beyond the handling of claims. The customer has to be kept satisfied. With so many options
available, a customer once lost is most likely loss for ever. Claims settlement can be used as
a marketing tool. Bringing in a new customer is much costly than retaining the existing ones.
Dissatisfied customer is a bad publicity and has all the potential to damage the reputation of
the company. It is an accepted fact that most of the customers complaint relate to claims. It
should be the endeavor of any insurance company to insure that such complaints do not occur
in the first place and in some cases if they do occur it is attended promptly, efficiently and
transparently. Delayed claim settlement, generally, result in higher claims cost. Claims cost is
a very important factor in the profitability of the company (Society insurance Professional,
2014)
1.2 Background of the originations

Ethio-life and general insurance S.C was founded by 117 shareholders with a clear vision of
introducing and promoting long-term insurance to the homes of millions. It obtained its
license from the national Bank of Ethiopia and commerce operation in October 2008 to
transact long-terms (life) insurance business Ethio-life continued to be the only specialized
company in the life insurance business in the Ethiopian insurance industry until Augest,2012,
In consideration of the immense potentials and viability of the general insurance business
emanating from the rapid economic growth of the country ,shareholders of Ethio-life were
determined to expand the service of the company by including Non-life general insurance
products into its business portfolio. Accordingly, the company was registered as composite
insurer and started providing innovative life and non-life insurance products since August
2012.Hence the name Ethio-life and general insurance S.C Emerged.
1.3 Statement of the Problem

Claims management is the core business area in the service of insurance company. The claim
is the tangible result of insuring. People take out insurance because they worry about the
possibility of misfortune ( kush,Max June 2015)

The researcher has got the opportunity to meet some customers who talks negatively about
Ethio life insurance Company after they lodged a claim entertained. Following this the
researcher interviewed the Head of Marketing and Research Division about the trend in the
number of lapsed Policies and the reply shows the trend is increasing in recent years. In
addition, as per his observation customers who complain in the service of the claims are ever
increasing (ELiG, April 2013)
According to (ELiG division Head, 2013) the increase in the number of lapsed policies is
mainly caused by the dissatisfaction of customers in the service of claims management. It is
clear that Claims payment involves outflow of money from the insurance company and
inflow to the customers. Hence, the insurance company always works to minimize its costs
(claims payment) whereas the customers’ demands higher amount of payments. The claims
handling procedures in balancing the payable amount will obviously matter in delivering
quality service.(ELiG, April 2013)
Since according to (Fricker,2013), claims management involves series of processes, there

might be time- taking decisions, inaccurate decision and inefficiency of overall claims
procedure of the company.
If claims are handled efficiently and rapidly, customers will be satisfied and satisfied
customers will continue to place their business with the company and thus increases
company’s market share and contribute to the profitability of the company. But customers of
Ethio- life and general insurance are complaining in the service of claims and are not temped
to renew their policy. For this reason the researcher is interested to assess the major factors
involved in claims settlement process of Ethio- life and general insurance and affecting
customer satisfaction.
1.4 Research Questions

 How does insurance claim practices and suitable in maintaining customer’s satisfaction?
 How Ethio - life and general insurance does addresses the issue of Indemnity?
 What are the major challenges of the ELiG claims handling practice to deliver fast claims
settlement service to its customers?

1.5 Objectives of the Study
1.5.1 General Objective

The general objective of this Study is to assess claims management practices of Ethio - life
and general insurance S.C in Addis Ababa.
1.5.2 Specific Objectives

 To examine the Ethio-Life and general insurance claim practice affecting
customer satisfaction.
 To assess the Ethio - life and general insurance means of addressing the issue of
indemnity.
 To identify the major challenges of the ELiG claims handling practice to deliver
fast claims settlement service to its customers.
1.6 Significance of the Study

The research may help for researchers, other researches (references), selected organization,
Insurances Company in our country and Ethio-life insurance company to examine the major
findings obtained and to take corrective measurements. It can also be used as basis for
another researcher to carry out similar researches. Though this research is intended for my
partial fulfillment of the degree of BA in Management, it helps the researcher as stepping
stone in my future carrier to become competent enough in solving problems by caring out
research. In addition customers’ will benefit from service review made by recommendations
based on finding of the research.
1.7 Scope of the Study

This study to assess factors affecting claims handling process and claims management to
solve customer compliances. Among 18 Insurance companies in our country this study
conducted on ELiG at Addis Ababa in main branch claims department by descriptive survey
design method and this study conducted in EliG by taking into account past three year data
from 2018/19 and 2020.
1.8 Limitation of the Study

While collecting questionnaires most of customers refuse to fill the questionnaires because an
anger crowd of claim settlement and claim schedules of Ethio-life General Insurance

Company. Some of branch manager or a committee member not interested to give the right
information or problems in underwriting claim departments problems during interview and
collecting questionnaires .it was time taking and exhausting to collect the questionnaires both
from employee and customers side.
1.9 Operational Definitions

Insurance:-system under which the insure, for a consideration usually agreed upon in
advance promises to reimburse the insured or to render service to the insured in the event that
certain accidental occurrence result in loses during a given period .it thus is a method of
coping with risk .its primary function to substitute certainly for uncertainty as regard the
economic cause of loss.
General (non life) insurance:-are insurance related to property, motor, liability & marine
policy
Life insurance:- are insurance related to life, person and permanent healthy policy
Claims service:-is formal request to an insurance company asking for a payment based on
the term of the insurance doing .insurance claims are revived by the company for their
validity and then paid out to the insured or requesting party (on benefit the insured).
1.10 organization of the Study

The research is organized into five chapters the first chapter that is introduction chapter
includes background of the study background of the organization, Statement of the Problem,
research questions, Objectives of the Study, Significance of the Study, Scope of the Study
and Operational Definitions. The second chapter contains review of related literature.
Chapter three deals with research design and methods. Chapter four focuses on presentation,
analyses and interpretation of data collected through questions .Finally summary, conclusion
and Recommendation of the study is given in chapter five.

CHAPTER TWO
REVIEW OF RELATED LITERATURER
2.1 Overview of Insurance

Insurance and claims are like front and back of one coin which cannot be isolated. For the
existence of claim there must be insurance, which is a prerequisite. Hence it is logical to
review some literatures on the concept of insurance and then followed by claims process.
Insurance is financial arrangement that redistributes the costs of expected losses. Insurance
involves the transfer of potential losses to an insurance pool. The pool combines all the
potential losses and then transfers the cost of the predicted losses back to those exposed.
Thus insurance involves the transfer of loss exposures to an insurance pool and the
distribution of losses among the members of the pool. An insurance system redistributes the
cost of losses by collecting premium payment from every participant (insured) in the system
(Dorfman, 2013).
In exchange for the premium payment, the insurer promises to pay the insured’s claim in the
event of a covered loss. From the legal point of view insurance is a contractual agreement
whereby one party agrees to compensate another party for losses (Dorfman, 2013).
One basic purpose of insurance is to provide for the indemnification of those members of the
group who suffers losses. This is accomplished in the claim settlement process, but it is some
time a great deal more complicated than just passing out money. The payment of losses that
have occurred is the function of the claim department. The nature of difficulties frequently
encountered in this field is called ‘adjusters’ (Teklegiorgis, 2004: 160).
possibility of misfortune. Ultimately the” value” of insurance will be judged for most
individuals by the way in which the claim is handled (Fricker, 2013).
2.2 General guidelines of Claims Handling

According to (James 2009), an insurer must:

i. Handle claims promptly and fairly
ii. Provide reasonable guidance to help a policyholder make a claim and appropriate
information on its progress
iii. Not unreasonably reject a claim(including by terminating or avoiding a policy)
iv. Settle claims promptly once settlement terms are agreed
v. A rejection of policyholder’s claim is unreasonable, except where there is evidence of
fraud, if it is for
A) Non- disclosure of a fact material to the risk which the policy holder couldn’t
reasonably be expected to have disclosed: or
B) Non-negligent misrepresentation of a fact material to the risk
C) Breach of warranty or condition unless the circumstances of the claim are
connected to the breach
According to(Qaiser,2014), claims management of general insurance involves the following

process:
i. As soon as a claim is reported, the insurance company checks as to whether the cover
was enforce at the time of loss and whether the peril is covered under the policy.
ii. A surveyor is appointed who visits the spot, does the assessment and submits the
report.
Insurance company examines the report, calls for relevant supporting documents
iii On receipt of survey report and documents, the claims file is processed
and settlement is offered (Qaiser,2014).
2.3 Focus area of Claims Handler to Know

According to (Fricker,2013), member of the chartered institute of insurance, the actual
procedure for handling claims varies according to matters such as the type of cover, the
amount of the claim and whether it is personal or commercial insurance claim. However, all
claims department/staff must be efficient and make rapid and accurate decisions based on the
position of the claim in law as affected by the insurance policy. To give efficient and prompt
service claims handler should know the following 15 listed technical knowledge applicable to
Insurance Policy.

Application of Policy conditions
The entirety of the contract between the insurer and the insured will be contained in the
policy documents. Conditions, broadly speaking, set of the insured’s obligations in relation to
the risk itself and often, more importantly, their obligations in the event of a loss (James,
2009).
The insuring clause
In essence the insuring clause says that, subject to all the terms of the insurance, the insurer
will indemnify the insured in the manner and to the extent specified in the policy. For
acclaim to be paid, the insuring clause must be triggered (James, 2009).
Claims made and losses occurring

The claim notification should include enough information to enable identification of the date
of loss i.e. the date on which the claim arose. Therefore the first issue for the claim handler is
to check whether that date of loss falls within the policy period. If it does, then it is necessary
to know which type of policy is under review, before it can be said with certainly that the
date of loss is indeed within the policy period. Therefore the claims handler must understand
the fundamental distinction between claims made and losses occurring policies (James, 2009)
Notification conditions and their operation
Whether a policy is claims made or loss occurring, it will contain provisions that specify the
policyholder’s duties and obligations for making a claim under the policy. Usually the
notification provision will specify precisely who the policyholder should notify the claim to,
how they are to communicate it and the time limit for the notification (James, 2009).
Insurable interest

It is fundamental principle of insurance law that in order for an insurance policy to be valid,
the policy holder must have a sufficient interest in the subject matter of insurance( James ,
2009).
Formation of contract
The insurance policy is a contract and so the basic rules of contract law will apply as they
will to any contract. In the context of an insurance contract, the insurer provides
consideration through its promise to pay claims. The insured’s consideration is payment of
the premium (James, 2009).
Utmost good faith

Both insurer and insured must deal with each other in an honest and open manner whilst
negotiating the insurance contract. The insured must disclose to the insurer, before the
contract is concluded, every material circumstance which is known to the insured, in the
ordinary course of business, ought to be known by him. If the insured fails to make such
disclosure, the insurer may avoid the contract (James, 2009).
Waiver and estoppels

Whatever the class of business, if the claims handler feels that the insured has breached a
policy term, then they need to bring this to the insured’s attention as soon as possible. The
most usual way of doing this is to advise the insured that the insurer’s rights are reserved
whilst further investigations are undertaken. The claims handler must thus ensure that they
clearly advice the inured of the issues that have led to the reservation of rights and what, if
anything, the insured can do or provide to enable the claims handler to reach a decision
(James, 2009).
Indemnity
Once the claim handler has established whether the insurance policy does indeed cover the
loss reported, their next task is to determine the amount the insurer should pay to their
policyholder in respect of that loss. In a simple case, the amount paid would equal the value
of the loss. However, there are many reasons why this does not always happen and claims

handler will need to bear in mind when ascertaining how much to pay under a policy (James,
2009).
Conditions and exclusion
A condition precedent within a policy means that compliance with the condition is strictly
required if the obligation tied into it is to be binding. It is clearly important for the claims
handler to be able to identify within the policy those terms which do have the potential to
produce this draconian result (James, 2009).
The underwriter will narrow the scope of the cover through exclusions, setting out the risk
areas or perils they do not intend to include within the remit of the policy. Checking whether
the policy excludes a claim is crucial part of the claims handlers’ job (James, 2009).
Subrogation
Refers to the right of an insurer, who has indemnified an insured in respect of a particular
loss, to recover all or part of the claim payment by taking over any alternative right of
indemnity which the insured possesses ( James ,2009).
Contribution
It is concerned with the sharing of losses between insurers when there is double insurance
exists. The overriding principles being that the insured cannot recover for the same loss twice
and that the insurers should share the loss in fair way (James, 2009).
Reinsurance recoveries
Reinsurance is ‘Insurance of Insurance’ and is the protection of the prime insurer’s bottom
line by either sharing the risk with reinsurers. It is a mechanism of buying protection against
adverse loss experience. The claims handler needs a basic understanding of reinsurance so

they know what is required in handling, recording, negotiation and settling claims to ensure
reinsurance recoveries. Here it is strictly advised to set excess of loss & determination of
companies’ treaty limits accordingly (James, 2009).
The under writing Process
It follows a series of stages at the end of which the status of a risk is decided .It is only after
the risk is weighed & all possible alternatives evaluated that the final underwriting is done
(James, 2009).
2.4 Claims Management

According to (Koballa, 2013) the claim management is reviewed as follows:
The objective of claims management is to ensure that claims services are run efficiently with
a view to satisfying the various stakeholders.
Claims settlement causes the largest outflow of money from an insurance company. For this
reason, proper handling of claims is important as it is key to protect both the shareholders’
funds and the funds created by the premiums paid by the policy holders (Koballa ,2013).
Whenever there is a claim, the insurer should Endeavour to provide the policy holder, who
suffers a loss, an appropriate indemnity. At the same time, it must ensure that (Koballa ,
2013) such payments are justified. This means that the Insurer must deal quickly and fairly
with all claims submitted be able to distinguish between valid and invalid claims; and operate
at minimum expense.
To do these functions successfully, an insurer must have an efficient claims department with:
Competent and well trained staff, efficient administrative support, efficient claims
procedures, efficient record keeping and management information system and clear corporate
claims philosophy (Koballa, 2013).
Oftentimes, loss situations awake the minds of the insuring public towards their insurer, as
many consumers pay little attention to their insurance coverage until they have a loss.
Claims, being the heartbeat of insurance, are the most critical contact the insuring public
perception of their insurer (Crawford, 2007).

(Singh 2012), noted that claims are a demand made by the insured person to the insurer for
the payment of benefits under a policy (Asokere & Nwankwo, 2010). However, to reduce the
cost of claims and deliver on a value-added brand promise to customers, non-life insurers are
focusing on enhancing efficiency and effectiveness in their claims function.
Claims processing is the acquisition, retention, enterprise business intelligence for product
development insight sand profitability for the next several years (Cap Gemini, 2011a). The
speed, accuracy and effectiveness of claims processing is also paramount for controlling
costs, managing risks and meeting portfolio underwriting expectations (IBM, 2011).
The task of handling claims process has been challenging. However, modernizing the claims
process for efficiency, effectiveness and flexibility has been being daunting task, due to the
fact that it is a mission-critical function that touches all parts of the organization, affecting
competitive positioning, customer service, fraud management, risk exposure, cost control,
and IT infrastructure (TIBCO, 2011)
Good practice 1:-Claims reporting
The insurance company writes insurance policies in easily understandable language. Policies
spell out what is covered and what is not covered. If necessary, plain language explanations
could be an addend unto the legal language. The insurance company draws the attention of
the policyholder/claimant/beneficiary1 both when he/she signs a policy (for policyholders
only)and when he/she reports a loss on his/her duties related to claim reporting which
include, to try to minimize losses
-To report claims in a timely fashion
-To co-operate in the investigation by providing the company with all relevant information
and, in particular, copies of official documents regarding the damage (accident, loss, etc.)
-To authorize the company to handle necessary inspections and assess the extent of the
damage prior to any repairs or replacement

-To ensure that the claims reporting phase proceeds as smoothly as possible the insurance
company sends to the policyholder/claimant/beneficiary within a reasonable period of time
(beginning from when the loss is reported):
An appropriate claim form (when the loss reporting is made in writing) for the type of policy
-prepared either by an individual insurance company or at the national level by companies or
the supervisory authorities together with instructions and useful information on how to
comply with the terms of the policy and the legitimate requirements of the company. The
information necessary to help them to report the claims
Good practice 2:-Receipt of claims by the company

The company claim department and/or the intermediary (if applicable) are as accessible as
possible for the claimant. If an intermediary is an initial contact for claimants, claims should
be sent to the company claim department within an time period.
The insurance company contacts the policyholder claimant/beneficiary or sends an

acknowledgement of receipt claim is received. Depending on the context, one or all of these
potential counterparts may be relevant.
Subsequently, if it appears that the claim cannot be settled rapidly, the company notifies the
policyholder/claimant/beneficiary and indicates that he/she will be re-contacted within
reasonable time limit. When it is necessary for the policy holder/claimant/beneficiary to
provide specific documents when filing a claim, the company sends him/her the list of these
documents as soon as possible
In addition, a specific notification listing the elements to be provided when another

insurance Company is involved is sent to the policyholder/claimant/beneficiary.
− If it appears that the claim is not covered by the insurance policy, the
companysendsanotificationassoonaspossibletothepolicyholder/claimant/beneficiary,
explaining why it is not covered.
− When the claimant is not the policyholder, the company sends him/her information on
his/her rights and duties when relevant.

When appropriate, the insurance company notifies the policyholder of his/her right of
subrogation and informs him/her of the main principles governing the subrogation procedure.
Good practice 3:- Claims files and procedures
Once a claim has been filed and, when applicable, after any additional documents that are
required to process the claim have been received, the file established by a company contains
the following documents:
 Claim filing number policy number

 Name of the policyholder/claimant/beneficiary
 Summary sheet showing development/review of the claim
 Type of insurance concerned
 opening date of the file
 Date of loss
 Reporting date
 Description of the claims
 Information on claimant
 Assessment date
 Electronic and/or paper copy of the adjustors’ and investigators’ reports where
applicable o
 Identity of the adjuster
 Estimated cost of damage
 Dates and amounts of payments
 Dates of denial if applicable
 Name of intermediary if applicable
 Date of file closure
 Documents recording contacts
 Documents recording contacts with the policyholder/ claimant/beneficiary.
Good practice 4:-Fraud detection and prevention

In order to curb the growth of fraudulent claims and the rise in premium costs that results
from them.
They establish compliance programs for combating fraud and money laundering appropriate
to their exposure and vulnerabilities.
In the claim filing phase, they discourage fraudulent practices by making the
policyholder/claimant/beneficiary aware of the consequences of submitting a false statement
(which in particular could be liable to prosecution) and/or an incomplete statement. To this
end insurance companies place a notification on their claims forms referring to the
appropriate law statute or insurance regulation that addresses the filing of fraudulent or
incomplete claims. Where legally possible, companies participate in relevant databases
where claims susceptible to be fraudulent would be reported. Moreover, public authorities
may encourage or take steps to initiate the creation of a public or private bureau of insurance
fraud.
Besides, companies provide their claims department staff with adequate training on fraud
indention.
Good practice 5:- Claims assessment General issues
Any method of taking into account specific factors such as depreciation, discount in go
negligence on the part of the victim is clearly outlined in the claim file any loss evaluation
methods used by the company are reasonable and coherent. The insurance company uses
internal methods for assessing claim values based on the applicable law of the jurisdiction the
role of claims adjusters Companies that use claims adjusters or intermediaries will need to
ascertaintheircompetencequalifications.Moreover,iftheseclaimsadjusters/intermediaries were
to commit any errors or misappropriation of funds affecting their policyholders, claimants or
beneficiaries within the framework of the contract with the insurance company, the latter
would be held responsible. Consequently, companies may decide to limit the scope of action
of claims adjusters and intermediaries (for example, by setting ceilings on the number of
claims they can handle). Companies notify policyholders/claimants/ beneficiaries whenever
they use independent claims adjuster or intermediates.

Good practice 6:- Claim processing
General issues:- A company’s claim procedures are gathered together in a manual for
internal use. At least, one staff member should be responsible for ensuring that the manual is
kept up to date and additions/amendments are made when necessary
Companies’ claims department staff possesses proper qualifications. To this end, companies
encourage ongoing internal or external training of their claims staff.
Regular internal audits are carried out for all claims not settled in their entirety. Internal
audits apply to all stages of the claims management process. Peer reviews (where the claims\
department staffs each other’s files) could also be carried out.
In case of claim settlement procedures involving several insurance companies, policyholder

indemnification is a priority: the claim should be compensated in an appropriate time period
while potential disputes between insurers are resolved at a later stage. For the most common
insurance claims (related to motor insurance, for instance), specific agreements are
concluded between insurers to accelerate and simplify claims settlement procedures insured
parties.
Insurance companies do not.
 Conceal policy coverage provisions of any insurance policy when they are pertinent to a
claim.
 Dissuade policyholders/claimants/beneficiaries from obtaining the services of an attorney
or adjustor.
 Attempt to settle claims for less than the amount to which the claimant would be entitled
to receive according to any written or printed advertising material accompanying the
application forms. However, insurers may take legal action against any intermediary that
has made irresponsible promises.
 Deny claims without reasonable investigation.
 Transfer responsibility for the claim to others, except as may be expressly provided for
by policy conditions Provision of information to policyholders.

The company keeps policyholders/claimants/beneficiaries informed of the progress during
the claims process. The company provides information on when payments, repairs or
replacements are expected to be made, and, if necessary, explains why additional time is
required. When the company decides to call on outside parties (i.e. loss adjusters, solicitors,
surveys, etc.),it informs policyholders/claimants/beneficiaries of this fact, gives the reasons
for this decision and explains the role that these outside parties will play in processing the
claim. When a final payment or offer of settlement is made the company explains to
policyholders /claimants/beneficiaries what the payment or settlement is for and the basis
used for the payment/settlement. The insurance company documents their claim files in order
to be able to address questions that may arise concerning the handling and payment of the
claim Cases of no/partial payment claims.
If the claim is denied, the insurance company states explicitly to the policyholder/claimant/
beneficiary the policy provision, conditions or exclusion on which the denial is based. If the
amount offered is different from the amount claimed, the insurance company explains there
as on for this to the policyholder/claimant/beneficiary.
When the insurance company is not responsible (by virtue of policy clauses) for meeting all
or any part of the claim, it notifies the policyholder/ claimant /beneficiary of this fact and
explains
Good practice 7:- Timely claims processing
In accordance with applicable insurance law, companies may specify in the contract the most
likely period of time responding to correspondence from policy holders/ claimants/
beneficiaries. Once policyholders/claimants beneficiaries have filed a claim:
They are informed of the acceptance or denial of the claim within a reasonable amount of
time the receipt of the notification
The insurance company contacts any other company that is involved in the claim within a
reasonable amount of time, and resolves inter-company claim disputes as quickly as possible.

The insurance company Endeavour’s to settle the claim as soon as possible and advises in
writing the policyholders/ claimants beneficiary on the reasons for any delay.
Quick claims settlement as well as high-quality and punctual information provided to the
policyholder/claimant/beneficiary are key competition features for insurance companies.
After an agreement has been reached between the company and the policyholder/claimant/
beneficiary on the amount of compensation, the payment is effected within a reasonable
amount of time.
Insurance companies implement and update their own statistical database tracing their
performance in the timely settlement of claims as well as in trends in settlements and
expenses.
A proper procedure for the coding and statistical processing of losses is developed for this
purpose.
Good practice 8:-Complaints and dispute settlement
Complaints/Disputes: When the policyholder/ claimant/beneficiary files a complaint the

company.
Acknowledges receipt of the complaint within a reasonable period of time Provides

policyholders/claimants/beneficiaries with explanations on how their complaints will handle
and on the procedures to be followed.
 Provides information to policyholders/claimants/beneficiaries on internal and external

dispute settlement procedures.
 Processes complaints promptly and fairly
 Keeps policyholders/claimants/beneficiaries regularly informed of how their
complaints are progressing.
 Provides a final response in writing within a reasonable period of time.
If the policyholder/claimant/beneficiary is dissatisfied with the final response that he/she has
been sent by the company, he/she can activate an internal appeals process. He/she can also

appeal to the dispute settlement procedures available outside the company (for example, the
handling of complaints by the supervisory authorities). In case of a dispute, the
insured/claimant/beneficiary should be informed by the company of the existence of these
appeal procedures
Good practice 9:-Supervision of claims-related services
 The insurance supervisory authorities may conduct examinations on claims

management services especially where problems are suspected.
 In these cases the following elements are taken into account
 Possible access to non-confidential claims data for all open and closed files within a
specified time frame (e.g. for the current year and the two preceding years)
 Maintenance of sufficient and appropriate information on claims files
 use of the appropriate type of claim form for the type of insurance
 Proper qualification of the claims department’s employees based inter alia on the
applicable insurance code.
 Valuation of claims payments according to company procedures.
 Appropriate tracking of the nature and number of complaints related to claim
management process.
 Monitoring of the proportion of claims that result in litigation.
 Compliance with procedures for combating fraud and money laundering.
 Regular internal audit practices on claims files.
 Appropriate internal claims procedure manuals.
 Proper procedure for coding and statistical reporting of losses.
 Performance in terms of the speed of claim settlements (as assessed according to the
statistical database implemented by virtue of item)
Good practice 10:- Market practices
The public authorities promote the implementation of a benchmark exercise regarding the
claims process or a specific part of this process (i.e. handling of complaints). The terms of
remuneration of insurance company employees or other services in charge of claim

management do not give incentives to disadvantageous treatment of policyholder’s
claimants/beneficiaries, as regards the handling or the outcome of claims.
Fraud Management
Not in the focus of top management, many insurers view fraud management more as a
specialist than a top management topic. They also often assume that the share of potential
fraudsters is below average due to careful underwriting and application checking processes at
their own company. (Michael Musiing ,2015) Journal
This often leads to high tolerance in the event of a claim, even if statements are clearly
contradictory. In most countries, it is the exception rather than the rule for fraud management
to be positioned as a top management topic, and for the level of tolerance to be defined as
zero in the interests of customers who are honest. (Michael Musiing ,2015)
Limited importance of fraud in operational claims processing. Usually a clear focus on the
topic of fraud is also lacking in individual claims organizations, and staff barely exchanges
notes. Alongside tools for the automatic recognition of fraud, systematic manual recognition
via checklists, fraud manuals or the like has proven especially effective, and can be
implemented fast. However, claims handlers responsible for manual fraud recognition are
often under heavy pressure from the high efficiency demands they come under from their
claims departments. (Michael Musiing ,2015)
The principle of having one claims file processed by several clerks is often the norm, too.
Both techniques make it harder to effectively recognize and fight fraud. Even comparatively
simple aids such as checklists or lists of guidelines can lead to considerably better results
without increasing the workload (Michael Mussing ,2015)
2.4.1 Quality Claims Handling

By its nature, insurance is a promise to pay in certain circumstances. When a claim occurs,
this is often the first contact a customer will have with the company since inception of the
policy. A perception of a company gained at this point is difficult to eradicate. Even if a

claim is paid in full, customers can be dissatisfied if the experience is less than what they
expected.
A quality claims service should therefore provide at least the quality that the customer
expects. Clients expect to be handled in an efficient, effective and appropriate manner. This
means that the claims must be handled in a consistent, yet flexible and fair manner that is
transparent, accurate and timely.
Claim handling is an important area in Insurance management, and should not be down
played as is often the case. This is because the core business of Insurance is to pay claims i.e.
No claims = No insurance. (Koballa ,2013)
2.4.2 Claim
An insurance claim arises when an insured event such as collision, overturning, fire,
accident, theft, sickness etc occur, resulting in a financial loss to the insured. A claim will
also arise out of liability of the insured to third parties ( Koballa ,2013)
A loss becomes a claim if there is in place a policy of insurance covering the events and the
insurance conditions are met i.e. when the occurrence of the perilous and subsequent events
meet the requirement of an insurance policy. This is necessary because failure to comply
with policy terms and conditions may lead to a delay in processing the claim or rejection of
the claim all together. Property to the insurer provided that you have been fully compensated.
(Koballa ,2013)
2.5 The claims Process

According to (Koballa ,2013) the actual procedure of handling claims varies according to the
class of business, the type of cover, the amount of claim and whether it is personal or
commercial risk that is insured. However, all claims will have the following 8 steps in
common:-
Identify the event giving rise to the claim
The object and peril must be insured under the policy of insurance for a claim to be sustained
under an insurance policy.

Claims notification
This is when the insured reports the claim to the insurer in the prescribed format i.e. by
filling the claim form or by telephone. The insured should supply the insurance company
with enough details about the claim and should enclose appropriate documentation, such as
receipts.
The policy terms should make it clear as to how claims should be notified, when and to
whom. This will be a condition in the wordings (usually 14 days of occurrence or
knowledge). The purpose of the claims condition is to enable the insurer to take steps to
investigate claims (or occurrence likely to give rise to a claim) in order to minimize its
exposure under the policy (Koblla,2013)
Claims review.
Reviewing the claims involves analyzing the claims in light of:-The proposal form, the
amount claimed, the exact terms of the policy, the legal requirements, market practice and he
Insurer’s corporate claims philosophy (Koblla,2013).
Response to claimant
The insurer’s first response to the insured may only be an acknowledgement or a request for
more information. Depending on what further information reveals, the insurers can take the
following actions:-Pay the claim, negotiate (bring in surveyors, claims adjusters etc) or reject
the claim. (Koblla,2013).
Claim investigation
In order to establish the facts surrounding the claim, it may be necessary to instruct an
internal claims inspector or external loss adjusters to undertake further investigations.
(Koblla, 2013).

Claims negotiations and settlement:-
Most insurers would wish to settle claims as quickly as possible. While some may be
disputed, the majority are settled to the satisfaction of all the parties. However, armed with
the full facts of the case, the insurer may decide that a lesser amount should be offered than
the amount originally claimed. The negotiation can be a long drawn process in cases where
there are disputes (Koblla, 2013).
The resolution of disputes is achieved via negotiations with the insured, alternative dispute
resolution mechanisms, arbitration or litigation. Sometimes, it is not possible to settle claims
amicably. On such occasions, the insurer and the insured must look for a form of dispute
resolution (Koblla, 2013).
Claim recoveries:-
Following payment of a claim, the insurer should investigate options of recoveries for all or
part of the claim from other sources. Third parties considered liable for the insured event may
be pursued; contribution or subrogation rights may be exercised. Reinsurers should be
contacted to contribute their share of claim (Koblla,2013).
The essential difference between insurance claims handling and reinsurance claims handling
is that reinsurance claims handling involves negotiations between two insurance specialists in
a business environment where a continuing business relationship may exist (Koblla, 2013).
Insurance claims handling, on the other hand often involves an insurance specialist
negotiating with a member of the public or commercial customer where a continuous
relationship is less likely if the claim settlement fails to meet insured’s expectation(Koblla,
2013).
Review of performance:-
Audits are usually carried out in respect of a sample of closed claims. Carrying out an audit
of claims handled can help the claims manager ensure that:-Standards of service are
maintained, internal decisions are made correctly, any reserves still attaching to the claims

reflect the current position and are in line with corporate reserving policy (Alemnew T. ,
2005).
According to (Alemnew T ,2005) No wander the claims department has been described as
the shop window of an insurance company. Bad experience of claims handling can affect
whether or not to renew with their current insurer. Hence the role of the claim department is
to: Provide a fast and efficient claims service, indemnify the policyholder in accordance with
the cover purchased, ensure that only valid claims are paid, deal with third party claim whilst
protecting the policyholder’s interest and protect the fund of premiums against overpayment,
fraud and expenses incurred due to inefficient claims- handling processes.
2.6 Customer Oriented Service

possibility of misfortune. Ultimately the” value” of insurance will be judged for most
individuals by the way in which the claim is handled (Fricker, 2013). This means though all
insurance company is paying claims, the way in which the customers are handled may differ
and the quality of their service can be evaluated through the level of satisfaction of the policy
holders. After all claims settlement process is full of service rendering activity and as a result
insurance companies should work toward attaining customer satisfaction. Hence views of
different authors from customers handling point is presented below.
2.6.1 Customer Service

Customer service is anything we do for the customer that enhances the customer experience.
Customers have varying ideas of what they expect from customer interaction. The customer’s
service provider must get to know his/her customer and strive to provide them with excellent
customer service. No matter how accurately we see our definition of customer’ service, we
still have to live up to what our customers thinks that customer service is. The customer/s
satisfaction is the goal to attain (Harris, 2000:2).
2.6.2 Importance of customer’s service

One of the most effective and least expensive ways to market a business is through excellent
customer service. Customers are an obvious requirement for doing business. The importance
of customer service is at an all- time high. Business realizes that providing a product/ service
alone is not enough in today’s competitive economic environment (Harris, 2000:2).
Today, customers are much more sophisticated. They are informed about how product should
perform and know that if they are dissatisfied with the service that they receive, someone else
probable sells the product and will provide better service. They may also expect that
expressing their unhappiness with a situation will elicit a positive result (Harris, 2000:2).
The provision of customer service is an important component of business cycle. In many

cases, customer’s service is the positive element that keeps current business coming back.
The customer’s service provider is frequently the one, who “saves the day” and the account.
When a person goes out of his or her way to provide excellent customer service work is more
fun and more fulfilling; as a result positive relationship with others develop(Harris, 2000:2).
2.6.3 Measure customer satisfaction

The field of customer satisfaction is complex. One of the most important facts in managing
customer satisfaction is to define specific service delivery standard and objectives and adjust
the performances. Organizations have several types of customers and performance within
specific category. If the outcomes of research demonstrate that the needs of customers are
met, institutions could well think their customers will be entirely satisfied (Oberoi, 2007:79)
Customers need will change over time and therefore so will their expectation of service
standards. However if they are to keep up with the customer over changing demands they
will need to ensure that they have some methods of assessing exactly what those
requirements are and measure their satisfaction(Oberoi,2007:80).
2.6.4 Importance of customer satisfaction

Satisfied customers are the sources of the company’s profit and they are the reason for the
existence of the companies that could be either private or public.
2.6.5 Customer satisfaction

Customer satisfaction depends on a product’s perceived performance in delivering value
relative to a buyer’s expectation. If products performance falls short of the customer’s

expectation, the buyer is dissatisfied. If performance exceeds expectation, the buyer is
dissatisfied.
Satisfied customers make repeat purchases and they tell others about their good experience
with the product. The key is to match customer’s expectations with company performance.
Smart companies aim to delight customers by “promising only what they can deliver, than
delivering more than they promise” (Kotler, 1996: 10)
2.6.6 Customer Retention

The retention is a key principle of customers by satisfying their requirements. This technique
is now used as a means of counter balancing new customers and opportunities with current
and existing customers as a means of maximizing profit (Gordon, 1999: 336).
Many companies in competing markets will redirect or allocate large amounts of resources or
attention towards customer retention as in market with increasing competition it may cost
five times more to attract new customers than it wood to retain current customers (Kotler,
1999).
2.6.7 The Art of service recovery

Complainers provide the firm an opportunity to recover from the service weaker. When the
service is provided incorrectly the first time, an important but often forgotten management
tool is the art of service recovery. When the service delivery system fails, it is the
responsibility of contact personnel to react to the complaint. Experts in the area of service
recovery recommend that in establishing service recovery as a priority and developing
recovery skills, firms should consider the following issues (Dorfman, M. 2005).
Measure the cost
The costs of obtaining new customers are three or five times greater than those of keeping
existing customers. Current customers are more receptive to the firm’s marketing efforts and
are, therefore, an important source of profit for the firm (Dorfman, M., 2005).

Respond Quickly
When a service failure does occur the faster the company responds the more likely that the
recovery effort will result in a successful outcome. In fact, past studies have indicated that if
the complaint is handled promptly, the company will return 95 percent of it unhappy
customers. The faster the firm responds to the problem, the better the message the firm sends
to customers about the value it places on pleasing its customers (Dorfman, M., 2005).
Actively encourage complaints
Experts assert that actively encouraging complaints is a good way to “break the silence”.
Remember that complainers who actually voice their complaints to the source of the problem
are the exception. Strategies to encourage complain includes customer surveys, focus groups
and active monitoring of the service delivery process to encourage customer satisfaction
throughout the encounter before a customer leaves the premises (Dorfman,M.,2005)
Complaint handling
According to (James 2009), Complaint handling procedures should enable complaints to
make a complaint by any reasonable means (for example, letter, telephone, email or in
person). A firm’s internal complaints procedures must make provision for complaints to be
investigated by an employee of sufficient competence who, where appropriate, was not
directly involved in the subject matter of the complaint. They must have sufficient authority
to settle complaints, including the ability to make offers of redress, or have ready access to
someone who has the necessary authority.
2.7 Practical Review

A claim, according to (Dinapoli 2013), is basically a demand presented for the payment of
money due for goods that have been delivered or services that have been provided. Vaughan
and (Vaughan 2008) define a claim as a notification to an insurance company that payment
of an amount is due under the terms of a policy. An insurance claim, therefore, is a demand
by a person or an organization seeking to recover from an insurer for a loss that an insurance
policy might cover (Brooks et al., 2005).
(Michael 2008) opines that insurance claims range from straightforward domestic building
and contents claims that are settled within days of notification to complex bodily injury
claims that remain open for many years. However, a claim on the policy is thus demand on
the insurer to fulfill its part of the promise, committed to while writing the contract with the
insured (Krishnan, 2010).
A claim is the defining moment in the relationship between an insurer and its customer
(Francis & Butler, 2010). (Singh, 2012) thus opines that retaining and growing market share
and improving customer acquisition and retention rates, insurers are focused on processing
by leveraging modern claims systems that are integrated with robust business intelligence,
document and content management systems which will enhance claims processing efficiency
and effectiveness.
According to (Low, 2000), efficiency measures relationship between inputs and outputs or
how successfully the inputs have been transformed into outputs. Efficiency is said to focus
on the input-output relationship, as opposed to output and outcomes; and that high efficiency
would be exemplified by the delivery of a large number for given inputs (Scott et al., 2008).
(Pinprayong & Siengthai 2012) had noted a difference between business efficiency and
organizational efficiency; while business efficiency reveals the performance of input and
output ratio, organizational efficiency reflects the improvement of internal processes of the
organization such as organizational structure, culture and community.
(Ilona & Evelina 2013) argued that effectiveness oriented companies are concerned with
output, sales, quality, creation of value added, innovation, cost reduction, and thus, must
measure the degree to which a business achieves its goals or the way outputs interact with the
economic and social environment.
(Capgemini ,2011a) opined that highly effective claims practices can be a key contributor to
a differentiated customer experience that strengthens customer loyalty and attract new
customers, which is especially valuable in a market with little or no growth. Excellence in
claims handling is being a competitive edge for an insurance company and it is a service that
clients greatly value.
Similarly, key components that must be in place in order to deliver excellence in insurance
claims handling according to (AIRMIC,2009), were noted as culture and philosophy,

communication, people, infrastructure, claims procedures, data management, operations, and
monitoring and review.
(Brooks et al. 2005), more so, suggest some step-by-step claims handling activities to
include: acknowledging and assigning the claim, identifying the policy, contacting the
insured or e, investigating and documenting the claim, determining the cause of loss and the
loss amount, and concluding the claim.
Meanwhile, claim efficiency and effectiveness, according to(Capgemini ,2011b), had been
noted to be core benefits for claims transformation, which include: claim handling and
administration; allocated loss adjustment expense; indemnity exposure; and total cost of
ownership. The Productivity Commission (2002) as cited in (Yusuf & Dansu ,2014) suggest
a good claim management embraces: proactive in recognizing and paying legitimate claims;
assessing accurately the reserve associated with each claim; reporting regularly; minimizing
unnecessary costs; avoiding protracted legal disputation; dealing with claimants courteously;
and whatever possible, handling claims expeditiously. (Michael ,2008) stated that the key
elements of a modern claim management system that can process all claim types should
include a case management component along with the ability to calculate and process
complex reoccurring payments.
Therefore, to significantly improve claims management and swiftly adapt to changing

situations, insurers must make more profound infrastructure changes that align claims
processing with corporate objectives for customer service, operational cost and risk
management (TIBCO, 2011). Then, to reduce the cost of claims ad deliver on a value-added
brand promise to customers, insurers must focus on enhancing efficiency and effectiveness in
their claims function (Singh, 2012).
(Esri ,2012) pointed at five steps for optimizing the insurance claims process to involve data
organization, analysis and planning, mobility, management, and customer engagement.
(Singh,2012) postulated that for insurers to achieve higher levels of operational efficiency
and better process effectiveness, they must look towards implementing modern claims
system or enhancing their existing claims systems, leveraging advanced fraud detection
technologies and innovating around self-service through processing.

(Rose,2013) affirms that the way an insurance company manages the claims process is
fundamental to its profit and long-term sustainability. In this regard, six core aspects of
predictive insurance claims processing were noted to include: fraud management, recovery
optimization, settlement optimization, claims benchmarking, activity optimization, and
litigation management.
2.8 Empirical review

As per the review of related source conducted in the previous
research
A claim according to ( Dinapoli ,2013) is basically a demanded presented for the payment of
money due for goods that have been delivered or services that have been provided. However,
a claim on the policy is thus demand on the insurer to fulfill its part of the promise.
Committed to while writing the contract with the insured (Krishnan, 2010).
A claim is the defining moment in the relationship between an insurer and the customer
(Francis & Butler, 2010). (Singh ,2012) thus opines that retaining and growing market share
and improving customer acquisition and retention rates, insurers are focused on processing
by leveraging modern claim system that are integrated with robust business intelligence,
document and content management system which will enhance claim processing efficiency
and effectiveness.According to (Low, 2000) efficiency measure relationship with inputs and
outputs or how successfully the inputs have been transformed into outputs.(Ilon & Evelina ,
2013) argued that effectiveness oriented companies are concerned with output, sales, quality,
creation of value added, innovation, cost reduction, and thus, must measure the degree to
which a business achieve its goal or the way outputs interact with the economic and social
environment.(Brooks et al. 2005), more so, suggest some step-by-step claims handling
activities to include: acknowledging and assigning the claim, identifying the policy,
contacting the insured.

CHAPTER THREE
RESEARCH DESIGN AND METHODS
3.1. Research Design

Descriptive Survey research design method is more elaborate methods in business studies.
Accordingly, researchers use a descriptive research design for the present study. This mainly
enables the researcher to describe the overall findings of the research. This method also helps
to describe the fact as it is.
3.2 Data Types and source

Our research is conducted with primary data that is collected from first-hand-experience.
Primary data is more reliable, authentic and objective. Primary data has not been changed or
altered by human beings; therefore its validity is greater than secondary data. Primary Data:
In statistical surveys it is necessary to get information from primary sources and work on
primary data.
Sources of Primary Data: Sources for primary data are limited and at times it becomes
difficult to obtain data from primary source because of either scarcity of population or lack of
cooperation. Primary data can be collected through experiments, survey, interview,
observation or questionnaires, but in our research we collects through survey and interviews
and observation method mainly based focused Ethio-life general insurance sc staff or
employees and annual reports of Ethio-life general insurance company
Survey: Survey is most commonly used method in social sciences, management, marketing
and psychology to some extent. Surveys can be conducted in different methods.
Questionnaire: It is the most commonly used method in survey. Questionnaires are a list of
questions either open-ended or close-ended for which the respondents give answers.
Questionnaire can be conducted via telephone, mail, live in a public area, or in an institute,
through electronic mail or through fax and other methods.

Interview: Interview is a face-to-face conversation with the respondent. In interview the
main problem arises when the respondent deliberately hides information otherwise it is an in
depth source of information.
Observations: Observation can be done while letting the observing person know that s/he is
being observed or without letting him know. Observations can also be made in natural
settings as well as in artificially created environment.
3.3 Target Population

Since claims are entertained centrally at Head Office level, the target population includes
claims department staff, claim committee members, and customers’ receiving service of
claims during data collection period
3.4 Sampling Size and Sampling Technique

The claim department has its own claims committee which consists of four members;
Finance, Claim, Under-writing and Business development department managers. These to
address the population census survey method are applied and total number of motor claims
processed in 2019/20 is 500. But addressing customers who received compensation before
data collection period is extremely very hard and expensive both in time and cost as their
addresses are scattered. In additions some claims are simply registered and become
outstanding for longer time without progress and addressing these customers is not
significant. From the total number of population who received the service a random Sample
of taken by accidental method by approaching claimants.
N 500
n= n=
1+ N ( e )2 1+ 500 ( 0.05 )2
n= 222
n =Sample size
N =Population Size
e = level of precision

3.5 Types of Data Collected
A primary source of data is used for the research study. Primary source of data is obtained
through survey method. The research used both quantitative and qualitative data. Information
gathered through questionnaire is summarized quantitatively while data obtained through
interview from claims committee is expressed qualitatively.
3.6. Methods of Data Collection

The primary data is collected through semi structured interview and close ended
questionnaire. Interview held with members of claims committee and claims divisions Heads.
While questionnaire is distributed to all claim customers. The student researcher uses
questionnaire because it keeps privacy of respondents and it is cheap and can gather large
information from wider response. Besides, interview with employee at management level is
carried out in order to triangulate the results obtained from employees and customers.
3.7. Data Analysis Method

After the data collection is over, the collected data is carefully edited, tabulated and
organized depending on the type of basic questions and the nature of the data. Then the data
is analyzed by using descriptive statistic method such as Table Percentage, Frequency
because it is appropriate to analyze quantitative data. Qualitative data obtained through
interview was presented by description. The customer satisfaction based on their claim
settlement response was collected from customer and tabulated in Table, percentage and
frequencies

CHAPTER FOUR
DATA PRESENTATION and ANALYSIS

This chapter mainly consists of two parts, the first part of the chapter deals with general
characteristics of the study and the second part to discuss on analysis of the findings of the
study. To collect respondent’s data for the study, the student researcher distributed
questionnaires to Out of distributed questionnaires to 10 claim officer ,28 risk underwriter,
and 5 committee members and 5 branch managers of ELiG employees and customers,36
(83%) and 128 (73%) questionnaires were collected respectively.43 employees using census
method and 179 questionnaires to the customers using accidental method. Out of distributed
questionnaires to employees and customers,36 (83%) and 128 (73%) questionnaires were
collected respectively. At the same period the student researcher interviewed claims
manager, and other three claims committee members.

The student researcher examines the claims practice of Ethio - life and General Insurance
Company from the point of view of employees, and customers’ point of view. Thus, in this
section response from employees and customers and managers are summarized in the form of
percentage, measures of central tendency and dispersion. In order to threat statistically the
measurement scales they are converted to number from 1-4 by considering “4” as the
maximum value (excellent/very satisfied/very fast/) and “1” as a minimum values (strongly
disagree/very poor/very slow/very dissatisfied /not sure).
4.1 Analysis of Employees Response
4.1.1General Characteristics of Employee Respondents

The respondents are profiled using sex, educational level, and work experience. As a result,
the following data were collected, analyzed and interpreted.
Table 4.1.: General Characteristics of Employees
Item
No. Questions Responses Number (%)
Male 24 67
1 Sex Female 12 33
Total 36 100
Diploma or below 10 28
1st Degree 20 55
2 Educational Level
2nd Degree & above 6 17
Total 36 100
< 1 year 2 5
1 to 2 - -
Work experience in
3 2 to 4 10 28
Handling Claims
4 to 10 24 67
Above 10 - -

Total 36 100
Source: Primary Data (2021)
As indicated in item 1 of Table 1, from the total respondents of the population, male
respondents were 24(67%) while the rest, female, consists of 12(33%). This indicates that the
gender distributions of both respondents are not proportional. Therefore one can infer from
the above data either the work nature requires male employee or there were discrimination
during hiring.
Item number 2 of Table 1 shows that 10(28%) respondents were Diploma holder or below,
20(55%) were Degree holder and 6(17%) employee holds 2 nd Degree and above. This data
implies that majority or 72% of employees are degree holder and above.
Department’s employees are well educated and this for efficient claims and risk underwriters
service.
Item number 3 of table 1 on the other hand shows that 2(5%) of the respondents had
experience of below 1 year, 10(28%) had an experience ranging from 2 to 4 , only 24(67%)
had an experience of 4 to10 Year and no employees had an experience more than 10 years .
This implies that 100 % of employees have an experience less than 10 years. The jobs nature
requires professionals and extensive interference with the customer. Hence, from this data
one can infer that the claim department of the company lacks experienced.
Man power making the service delivery in efficient. This is in line with the company’s
annual report of 2020/20 which states that “almost all work units were forced to operate
understaffed and with low level of expertise, which made the work to be done more
cumbersome”.
4.1.2. Claim Management Strategy

Claim management strategy offers comprehensive claims administration and management for
claims department. Allow claims and potential claim to be identified and evaluated by
assessing their merit an early on and claim potential can be avoided or resolved quickly we
have clear claim strategies.

Table 4.1.2: Claims Management Strategies
Total
S.No Question Yes % No % No.
Frequency %
Does your company clearly
1 defined claims management
34 94 2 6 36 100
strategy
Is strategy communicated to
2
the employee 26 72 10 28 36 100
From items 1, 34(94%) of respondent agreed as their company have defined clear claims
managements and 2(6%) disagreed. But from item 2,10(28%)respondent have not
communicated clearly the strategies to the employee and they don’t have the clear
information strongly advice that ELIG managements have to clearly communicated and
closely flow up his employee
4.1.3 Measure of Customer Satisfaction

Many companies try to measure their treatment toward there customers .The are trying to
identify the factor that shape the satisfaction of customer through survey questionnaires
,according to those factor depending on to feed back company try to change their operation
Table 4.3 Measure of Customer Satisfaction

Total
Question Yes % No % No.
Respondent %
Does your company has
1 customer satisfaction 26 72 10 28 36 100
monitoring system

From Table 3,item 1,number of respondent 26(72%) have told us their company have
customer satisfaction monitoring system and the rest 10(28%) disagreed or have no
information so, we recommend that ELIG to have customer satisfaction monitoring system
to increase customer lifetime value and it limits negative word of mouth.
4.1.4. Customer Relationship

Customer relationships describes the types of relationship accompany establishes with its
specific customer segments put yourself in the customer shoe.
Table 4.4: Customer Relationship
Question Total respondent

How do you rate over all
relationship with your Number %
customer
Excellent 2 6
Very good 26 72
Good 8 22
Poor - -
Total 36 100
From Table 4 we have concluded accordingly by data we collected from respondent 2(6%)
excellent,26(72%)very good customer relationship,8(22%) and no data we got. the employee
have very good relationship with their customer, but it’s not enough they should improve it
4.1.5 Claim Management Training

This goal is to provide adjusters and risk managers with information on how to identify claim
activities, knowledge presentation of loss factor and enhance interaction with experts to build
world class claim administration or management for the organization.
Table 4.5 Claim Management Training
Yes No Total
S.No Question No. No. % No. %

respondents % respondents
Is your company
1 currently using any
technology to
20 56 16 44 36 100
enhance. its claim
management
Does your company
2 train his staff on
claims management 32 89 4 11 36 100
periodically
How often your Weekly Monthly Quarterly Annually
3 companies train his
staff on claims No. % No. % No. % No. %
management - - 20 16
periodically?
From the above table 5:-item 1 data collected from respondent 20(56%) were agreed that
their company using technology to enhance its claim management,16(44%) were not agree
that the company are not using technology to enhance the claim management ,so the
company should use the technology that are convenient claim management and reduce the
time consumed because of manual work or delay.
Item 3 most employee agreed that taken the training by most staff took quarterly20(56%) or
annually16(44%) this implies that the company is not interested to train his staff periodically
and once in a year or once in quarterly it is not enough, means the staff were not trained.
4.2. Employee Adaptability and Customer Cooperatives

The working environments and condition can easily affect employee adoptability and this
adaptability can initiate the employee to have good team spirit customer cooperatives and
good relationships this topically affect the claims management practices.

Table 4.6:- Employee Adaptability and Customer Cooperative
1 Does employee ability Very

Excellent Good Poor Total
to adopt working good
environment and
No. % No. % No. % No. % No. %
condition for
consistent service
delivery
2 6 20 55 12 33 2 6 36 100
2 Are the employee
cooperative and good Yes No Total
relationships with the
No. % No. % No. %
customers?
34 94 2 6 36 100
From the above items 1,employee respondent have excellent2(6%),very good 20(55) good
12(33%) and poor 2(6%)from all above data the means 2.05 and deviate to 1.2 which mean
ability to adopt working environment and conditions for constituent service delivery is at
very good level in ELiG insurance sc.
From item 2 data collected from respondent shows that 34(94%) have cooperatives and good
relationship to customers and 2(6%) haven’t good relationship with customer and
cooperative which means employee have good relationship with customer and cooperatives
in ELIG insurance SC.
4.2.1 Claim Management Challenges
Most Claim department today may face with many problem like lack of modern technology
facilities, insufficient information for risk management, existence of unqualified personnel’s
in claim the claim department and inefficient as regard the time used in assessing risk.
Table 4.7 Claim Management Challenges
Yes No Total
List of Challenges
No. % No. % No. %
Lack of modern
1 -
technological facilities 16 44 36 100
Insufficient information for
2 -
risk management 10 28
Existence of unqualified
3 personnel’s in claim the -
6 17
claim department
Inefficiency as regards the
4 -
time used in assessing risks 4 11
From the above data collected from respondent16 (44%) mostly in ELiG insurance sc have
lack of modern technological facilities and 10(28%) insufficient information for risk
management which is going to affect the directly profit of the company,6(17%)existence of
unqualified personnel’s in claim department and 4(11%) in efficient as regards the time used
in assessing risks in ELiG insurance Sc.
4.2.2Analysis of Questionnaires Filled by Customers
4.2.3General Characteristics of Customers’ Respondents

To have a general view about the company’s customer, clients were asked to give
information about their gender and for how long they have established relationships.
Table 4.8 Background of Respondents
No. Questions Responses NO. %
1 Sex Male 112 87

Female 16 13
Total 128 100
< 1 year 35 27
1-3 46 36
2 Span of relation ship 3-5 27 21
>5 20 16
Total 128 100
Source: Primary Data (2021)
As noted on table 3.2 of item number 1, 112(87%) of customer respondents were male and
16(13%) of them were female. This implies that majority of claims were brought by Male.
From this data one can deduce that number of male and female respondent are not
proportional due to either majority of resources are controlled by males or females are not
insuring their property.
Item number 2 of table 3.2 shows that 92(73%) of claimants have business relationships of
more than 1 year. Only 35(27%) have experience of less than one year. This imply that
majority of claimants have already established relationship. Therefore the student researcher
concludes that the company should give due care in retaining its business with existing
customers.
4.2.4 Analysis of the Findings of Customer Respondent
4.3 Claim Settlement Procedure

For many insurance companies, fast claim settlement service is considered to be a
differentiator that distinguishes them from the competitors. The following table deals for the
procedure of claim settlement in ELiG Insurance S.C
Table 4.9 Claim Settlement Procedures

Yes No Not sure Total
Question
No. % No. % No. % No. %
Do you think your
appreciate your claim 20 16 60 47 45 37.5 128 100
1
settlement
procedure?
Table 4.9 indicates that with 20(16%) respondents believe that the clients appreciate a clam
settlement procedure of the company the rest 60(47%) they are not appreciate and 45(37.5)
of the respondents are not more clients appreciate or not the claim settle procedure. It implies
that the company give a less attention to the procedure of the claim settlement procedure and
they assess their claim settlement procedure because of procedure claim settlement may
delay and service quality may reduce.
4.3.1 Customers Attitude on Claim Settlement

The following table deals that the understanding of the customers in their claims & duration
of claim settlement used by ELiG insurance S.C. In addition to this the table deals about
recommendation of ELiG insurance for their friends.

Table 4.10 Customers Understanding & Prompt Claim Settlement
satisfied
satisfied
Very
Not
S.No Question
Total
Neutral
satisfied
No. % No. % No. % No. % No. %

Do you think your
1 claim settled as per 30 24 45 35 8 6 45 35 128 100
your understanding
and cover you have?
Question
No
Total
Not
Yes
No. % No. % No. % No. %

2 Do you think the prompt
of claim settlement
provided by ELiG 33 26 50 39 45 35 128 100
insurance SC is effective
compare to other
insurance company?
3 Would you recommend

your friend to ELiG 31 24 90 70 7 5 128 100
insurance?
From the above Table 10.Item No. 1 indicates that 30(24%)of the respondents said that their
claim settled in the way of they expected ,45 (35 %) of the respondents said that claim settled
in the way of they expected which in turns , 8(6%) neutral and 45 (35%) they are not sure
about claim settlement. From above data mean is indicate 2.5 and it deviated to 1.1 or not
satisfied with claim settlement with the cover they have this shows that claim officers did not
reach quality claim service in accordance with cover they have and information gap created
between customer and both claim officer and underwriter. This may cause decrease the
quality of claim service and increase claimant complaints.
Item No. 2 of similar table shows that 33(26%) of the respondents have got fast claim
settlement while 50(39% ) they didn’t got fast claim settlement and 45(35%) they didn’t have
information or not are sure about claim settlement in other insurance company from data
above its mean indicate 1.9 and deviate to 1 ,it shows that the companies didn’t gave a fast
claims settlement to compare other insurance companies
Item No. 3 shows that it is relatively smaller proportion of respondents which is 31(24%)
who are willing to recommend EliG Insurance S.C and 7(5%) not sure but 90(70 % )of
respondents are not willing and not sure to recommend EliG Insurance S.C.to their friends .
Therefore, it is possible to conclude that the company gives less attention on it by creating
brand image.

4.4 Information Given by Underwrite on Claims Produces
The following table indicated that the how the underwriter can give information about claim
procedure during the time of policy insurance for customers.
Table 4.11 Information Given by Underwriters on Claim Procedure
Question Yes No Not sure Total
No. % No. % No. % No. %

How was information given by
1 underwriter during time of 50 39 60 47 18 14 128 100
policy issuance?
Table 4.11 indicates that with a sum percentage of 50(39%) respondents did get good
information on claim handling procedure from risk underwriters while 60(47%) of the
respondents didn’t get information on the procedure of the claim rest 18(14%)respondents
not sure information on claim procedure at the time of policy issuance. It implies that most of
underwriting officer didn’t give a brief explanation to on the claim procedure at the time of
issuance of the policy this also creates a problem for the claim officer too.

CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

This chapter is the last part of the study which deals with Summary of the findings,
conclusions and recommendations made by the student researcher.
5.1. Summary
This study tried to address 3 basic questions stated earlier in chapter one of this study.
Accordingly, all the necessary information is collected from respondents by raising specific
questions and the findings are summarized as follows:
 Employee were asked through questionnaires the most challenges in ELiG Claim
department today in percentages as follow lack of modern technology facilities
(44%), insufficient information for risk management (28%), existence of unqualified
personnel’s in claim the claim department (17%)and inefficient as regard the time
used in assessing risk (11%).
 The customers were asked if the claim settlement provided by EliG Insurance as per
their understanding and cover they have, But from the respondent we attend to only
24% of respondent said their claims settled or handle as per their understanding and
cover they have also 70 % of respondent have complaints and dissatisfied with their
claim settlements. But claim settlement is major factors involved in determining
indemnity but based on data collected the indemnity principle of insurance were
broken. Accordingly, indemnity insurance principle ensures that policy holder receive
and settle an amount in benefit equivalent to their actual losses, so do not make a
profit from it.
 We try to compare ELiG with its competitor by asking customer the prompt claim
settlement service when comparing with other insurance company. But the
respondent answer as flow 74% of respondent didn’t get prompt claim settlement
service and only 26% of respondent get fast claim settlement service but majority of
claim settlement delay occur because of poor claim management. Based on this
analysis most customers decline to renew during policy renewal.

 Therefore possible to conclude that company gives less attention on creating brand
image because of poor claim settlement services.
 72% have told us their company have customer satisfaction monitoring system and
the rest 10(28%) disagreed or have no information.
 We were tried to ask the customer and employee claim practices and maintaining
customer satisfaction from respondent claim settlement procedure that with 16%
respondents believe that the client appreciate a claim settlements of the company the
rest 84%they are not appreciate claim settlement procedure.
 Employees were asked if the claims handling practice of Ethio-life and General
insurance company is convenient and transparent to deliver quality service.
Accordingly 12(33%) of them replied that the company’s claims handling practice is
not convenient as well as transparent. Besides discussion has been made with
company’s Claim Committee and they have mentioned that the practice of handling
the claims is not as such convenient to deliver quality service.
5.2. Conclusions
Based on the respondents answer and summary of findings, the student researcher has drawn
the following conclusions.
 Most of underwriting officer didn’t give a brief explanation to on the claim procedure
at the time of issuance of the policy this also creates a problem for the Claims officer
too.
 From the research finding it can be inferred that the claim practice of Ethio - life and
General insurance company is not as such convenient and transparent which is the
cause for customer dissatisfaction.
 The research finding shows that supporting documents required to be fulfilled by the
customers are not requested at once and fragmented way of requesting documents
will lead to customer dissatisfaction.
 As per the research findings the art of service recovery (complaint handling) is not
well addressed. As a result the company misses the opportunity to address its
weakness and take corrective actions to deliver the service to the satisfaction of the
customer.

 As it is observed in the research findings majority of customers’ response shows that
list is slow indicating the service of claims is not prompt enough.
 It can be inferred from the research finding that the various process involved in
determining the indemnity is not considerate of the insured’s expectation. As a result
it will become the cause for dispute.
 From the research findings it can be inferred that the service is not consistent among
officers due to inconsistence in using claim manual.
 The research findings reveal that the company does not have the means to know
whether the customers are satisfied or not.
 The research findings reveal that the company does not have not using advance
technology to and claim manual
5.3 Recommendations
Based on the data gathered from employees and customers and the major findings obtained,
the student researcher gives the following recommendations.
 Insurance is a promise to pay in certain circumstances. When a claim occurs, this is often
the first contact a customer will have with the company since inception of the policy. A
perception of a company gained at this point is difficult to eradicate. Even if a claim is
paid in full, customers can be dissatisfied if the experience is less than what they
expected. Therefore the company should review the claim handling practice so that it will
be convenient, transparent and provide efficient services to the satisfaction of its
customers. In this aspect it will be better if it adopted management philosophy such as
total quality management or business process reengineering.
 According to unpublished training book of Ethiopian Insurance Corporation, No wonder
the claims department has been described as the shop window of an insurance company.
Bad experience of claims handling can affect whether or not to renew with their current
insurer. Hence the role of the claim department includes Providing a fast and efficient
claims service as well as Indemnify the policyholder in accordance with the cover
purchased. Hence the department has to be organized by skilled, competent and
empowered employees.

 In order to retain customers, the company should assure customers are satisfied. To know
this ELIG should carry out regular customer satisfaction survey.
 Complainers provide the firm an opportunity to recover from the service fail. Experts
assert that actively encouraging complaints is a good way to “break the silence”. A firm’s
internal complaints procedures must make provision for complaints to be investigated by
an employee of sufficient competence who, where appropriate, was not directly involved
in the subject matter of the complaint. Hence the company should see complaints as
opportunity to see its weakness and revise and implement the Policies and procedures on
the claim manual to address complaints in the way that it enables to recover from service
failure.
 Determining time standard enables the company to make control weather customers are
served or not in accordance with set time. Hence it is better to the company to standardize
the process so that each employee acts to meet minimum.
 Customers insure their property to get indemnity at the time of a loss. In order to reach
on the indemnity amount the claim process needs to pass through various stages. Hence
the company should invite competent garages, should handle tender transparently, should
take care of over imposing contribution as well as imposing on non-depreciable items and
should advise the insured on the time of assessment so that any unforeseen parts may not
be ignored. In addition the company should hire competent employee and give sufficient
training so that they can be able to manage their work efficiently to minimize customer
dissatisfaction.
 We recommended that ELIG to have customer satisfaction monitoring system to increase
customer lifetime value and it limits negative word of mouth.

References
(Capgemini 2011a). Claims transformation: Enhancing brand value by delivery on customer
commitments, capturing efficiency gains, and optimizing indemnity expenditure
(Capgemini 2011b). Claims system migration and enhancement cuts costs by $ 15 million
and improves customer relationship. USA: Computer Sciences Corporation.
(Crawford 2007). Trends in claims handling: Insurance industry update. Canada: Crawford &
Company Inc
(DiNapoli, 2013). Improving the effectiveness of your claims auditing process office of the
New York State comptroller. Retrieved from http://.www.osc.state.ny.us
(Dorfman ,2013) Introduction to Risk Management and insurance
ELiG, 2013) Ethio-life and general insurance Annual report
(Esri 2012)GIS for the insurance claims process five steps for an effective workflow
(Frances and Butter, 2010) cutting the cost of insurance claims and taking control of the
process, strategy and retrieved from http.WWW.booz.com.
(Harris 2007) Customer service A practical Approach 6th edition
(IBM 2012).Insurance claims fraud assessment: Reducing loss costs by combating insurance
claims fraud. USA: IBM Corporation.
LoW
(Michael ,2008)The increasing important of claims management to insurance The national
underwriter company
(James ,2009) Risk Management insurance 12th edition.
(Kush, June2015) The Statement problem quality progress.
(Krishnan,B.2010).Claims management and claims settlements in life insurance. The Journal

of Insurance Institute of India, 36(July-December),49-57.

(Koble. S.2013), Supervisors conflict management style and causal attribution.
(Pinprayong & Siengtai,2012) Restructuring for organizational efficiency in the banking
sector in Thailand
(Qaiiser,2013) Claims management in General Insurance
(Rose .2013) predicting claims process, Transformation the insurance claims cycle using
analytics
(Singh, 2012). Global trends in non-life insurance: claims.
(Teklegiorgis ,2004) Risk insurance and Management Addis Ababa.
(TIBCO 2011). Dynamic claims processing. USA: TIBCO Software Inc.
(Yusuf & Dansu 2014) The effect of claim cost on insurances.
APPENDIX I

DEPARTMENT OF MANAGEMENT
Questionnaire to be filled by Ethio-life and General insurance S.C Employees’
Dear Respondents, the purpose of this questionnaire is prepared as part of the researches
effort to practically fulfill the requirements for BA degree in management from Gage
university college .The object of the research is to asses claim management practice of Ethio-
life and general insurance S.C. Your active participation in the research and your honest
feedback to the questioners will help us to achieve the objective .the date shall be kept
confidential and used for academic purpose only .you are not required to indicate your name.
Thank you in advance for your Corporation!
INSTRUCTION
Please put tick mark () on the box provided and write your answer for those open-ended
question.
Part One: Employee Demographic Information
1. Sex Male ( ) Female ( )

2. experience
Less than 1 year ( ) 2 year to 4 year ( ) 4 year to 10 year ( )
above 10 year ( )
3. Educational Background
Degree ( ) Diploma ( ) Masters ( ) Above Masters ( )
4. How many claims officer does your insurance company has?
Less than 5 ( ) 6 to 10 ( ) above 10 ( )
Part Two: Claims Management Practice
1. Does your company has a clearly defined claims management strategy?

Yes ( ) No ( )
2. If yes is the strategy communicated to the employees?
Yes ( ) No ( )

3. Are the employees cooperative and have good relationship with the customers?
Yes ( ) No ( )
4. How do you rate the relationship with your customers?
Excellent ( ) Very good ( ) Good ( ) Poor ( )
5. Does employees ability to adopt working environment and conditions for consistent
service delivery?
Excellent ( ) Very good ( ) Good ( ) Poor ( )
6. Does your company have customer satisfaction monitoring system?
Yes ( ) No ( )
7. Is your company currently using any technology to enhance its claims management
practice?
Yes ( ) No ( )
8. Does your company train their staff on claims management periodically?
Yes ( ) No ( )
9. If yes, how often?
Weekly ( ) Monthly ( ) Quarterly ( ) Annually ( )
10. Is there any claim challenge(s) over the recent years yet to be resolved?
Yes ( ) No ( )
11. If yes, is it related to:
( ) Lack of modern technological facilities

( ) Insufficient information for risk assessment
( ) Existence of unqualified personnel’s in the claim department
( ) Inefficiency as regards the time used in assessing risks
12. If you want to add something:

DEPARTMENT OF MANAGEMENT
Questionnaire to be filled by Ethio-life and General insurance S.C customers
Dear Respondents, the purpose of this questionnaire is prepared as part of the researches
effort to practically fulfill the requirements for BA degree in management from Gage
university college .The object of the research is to asses claim management practice of Ethio-
life and general insurance S.C. Your active participation in the research and your honest
feedback to the questioners will help us to achieve the objective .the date shall be kept
confidential and used for academic purpose only .you are not required to indicate your name.

Thank you in advance for your Corporation!
INSTRUCTION
Please put tick mark () on the box provided and write your answer for those open-ended
question.
Part One: Customer Demographic Information
1. Sex Male ( ) Female ( )

2. Year span business relationship
Less than 1 year ( ) 2 year to 4 year ( ) 4 year to 10 year ( ) above 10 year ( )
3. Educational Background
Degree ( ) Diploma ( ) Masters ( ) Above Masters ( )
Part Two:-Customer satisfaction based on claim procedure and settlement
1. Do you think your claim settled as per your understanding and cover you have?
Very satisfied ( ) satisfied ( ) not satisfied ( )
2. Do you think the prompt of claim settlement provided by EliG Insurance SC is

effective compare to other insurance company?
Yes ( ) No ( ) I don’t Know ( )
3. Would you recommend ELiG Insurance to your friend?
Yes ( ) No ( )
4. How was the information given by the underwriter on claim procedure during the
time of policy issuance?
Very good ( ) Good ( ) Fair ( ) Neutral ( ) No ( )
5. Do you think your appreciate your claim settlement procedure?
Yes ( ) No ( ) Not sure ( )
6. If you have want to add something

_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________

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Student’s Declaration

Name Signature Date

1. Ayelech Gulema ____________________ _________________

2. Demisew H/giorgis ___________________ __________________

3. Getahun Dessie ______________________ _________________

4. Guedity Denboba ______________________ _________________

5. Tirunesh Habte ______________________ __________________

Gage University College

Assessment of Claims Management Practices in Case of

Ethio- life and General Insurance S.C.

Gage University College

_________________ ______________ ____________

Advisor Signature Date

__________________ _________________ ____________

External Examiner Signature Date

_________________ _____________ _______________

Internal Examiner Signature Date

Gage University College

Gage University College

Gage University College

Gage University College

ELiG Ethio –life and General insurance S.C

S.C Share company

Gage University College

Table 4.2 Claims Management Strategies…………………………………………45

Table 4 .3 Measure of Customer Satisfaction………………………………………46

Table 4.4 Customer Relationship ………………………………………………….....46

Table 4.5 Claim Management Training ………………………………………….....47

Table 4.6 Employee Adaptability and Customer Cooperative ……………….49

Table 4.7 Claim Management Challenges………………………………………...50

Table 4.8 Background of Respondents………………………………………….......51

Table 4.9 Claim Settlement Procedure………………………………………………52

Table 4.10 Customers Understanding & Prompt Claim Settlement…………….54

Table 4.11 Information Given by Underwriters on Claim Procedure…………...56

Gage University College

This study is on empirical investigation of insurance claims management among selected

Keywords, Claim settlement, customer Satisfaction and claim Management.

Gage university college X

1.1. Background of the study

According to (James, 2009),The handling of claims is a key part of an insurer’s business. It is

Gage university college 1

1.2 Background of the originations

1.3 Statement of the Problem

Gage university college 2

Since according to (Fricker,2013), claims management involves series of processes, there

1.4 Research Questions

Gage university college 3

1.5.1 General Objective

1.5.2 Specific Objectives

1.6 Significance of the Study

1.7 Scope of the Study

1.8 Limitation of the Study

Gage university college 4

1.9 Operational Definitions

1.10 organization of the Study

Gage university college 5

REVIEW OF RELATED LITERATURER

1. Ayelech Gulema ____ _

2. Demisew H/giorgis _

3. Getahun Dessie ______ _

4. Guedity Denboba ______ _

5. Tirunesh Habte ____

___

__________ _ ____

___________ _ _________