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IAI Actuarial Core Principles · Business Management · Using data, company functions, people skills, influence and clear communication

Hind Suraksha Life, an Indian insurer, notices that its customer complaints about delayed claim settlements are rising. The claims team says the delays arise because the underwriting team accepts proposals with incomplete medical evidence, which later require investigation at claim stage. Which interaction between company functions does this scenario best illustrate?

The scenario shows that underwriting choices affect claims. Accepting proposals with incomplete medical evidence pushes investigation work to the claim stage, causing delays and complaints. It is a dependency between sequential functions, not a finance, marketing, IT or HR issue.

  1. AUnderwriting decisions at the front end create downstream workload and cost for the claims functionCorrect
  2. BThe finance function is overriding the claims function on reserving
  3. CThe marketing function is setting the claims payment policy
  4. DThe IT function is responsible for setting underwriting standards
  5. The human resources function is determining claim admissibility

Explanation

Incomplete evidence accepted at underwriting leads to investigation and delay at claims. This is a dependency between sequential functions in the value chain. The other options attribute decisions to functions that the scenario gives no role in.

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