Claims management is the part of an insurer's core that records every loss a customer reports, follows it through the assessment of the damage, and pays the amount that is agreed. A claim is a customer's request to the insurer to pay for a loss that the policy covers.
A claim goes through several stages. First, the customer reports the loss. This first report is called the first notice of loss (FNOL). The system opens a claim and checks that the policy was active on that date and covers that kind of loss. Second, the insurer sets a reserve, the amount of money it expects to pay, and keeps it aside. Third, the damage is assessed. Fourth, the system checks for signs of fraud, such as a claim made a few days after the policy started. Finally, the system pays the agreed amount, minus the deductible. The deductible is the part of each claim that the customer must pay.
Here is a typical case. A delivery van in Bhopal is hit from behind at a traffic signal. The owner reports it the same day in the insurer's app. The system finds the policy, confirms that own-damage cover is active, and opens a claim with a reserve of ₹50,000. The photographs go to AI claims estimation, which estimates ₹46,000 for a new rear door and bumper. A surveyor, the person who inspects damage for the insurer, confirms the estimate at the garage. The system deducts a ₹1,000 deductible and pays ₹45,000 directly to the garage. Then it closes the claim.
Health claims follow the same stages, with many more rules. In India, hospitals and insurers are moving health claims onto the National Health Claims Exchange (NHCX), a shared network that carries claim documents between them in a standard format. Checking each medical bill against the policy and the medical rules is called claims adjudication.
Claims management is one of the three parts of the insurance core system. It reads the policy written by the policy administration system. Claims are the largest cost of any insurer, so small errors in this system can cost a great deal of money.