Industry · Insurance
Claims and underwriting routines applied the same way by every handler.
Handling quality varies with who picks up a file, and a regulatory or policy change reaches handlers unevenly.
Example: Larkfield Insurance Group (fictional). Fictional organisation, fictional data, scripted answers.
What makes this sector hard
- 01Two handlers given the same claim reach different outcomes because the guidance lives in people's heads and old emails.
- 02A change in the rules that apply reaches handlers unevenly, and nobody can show who was told what.
- 03Reserves are set on judgement and revisited rarely, so the surprises arrive in bulk.
- 04Policy wordings and reinsurance agreements are long, and the clause that matters is found only when a claim hits it.
See it work on Larkfield Insurance Group’s own data
Simulation. Five short examples, one for each working area. The wording is scripted and no model is called; the figures are computed from what you decide, and a person’s approval covers exactly what you decided.
Write the handler guidance for a water-damage claim, from what the documents support
- What happened
- Handlers are treating escape-of-water claims inconsistently, and the technical lead is drafting a single page of guidance.
- The question
- Which statements can go into the handler guidance because an approved source supports them? Asked by: Claims technical lead.
Write the handler guidance for a water-damage claim, from what the documents supportChoose the statements that go into the draft guidance. A statement with no approved source behind it is refused; an estimate is labelled as one.Open
Choose the statements that go into the draft guidance. A statement with no approved source behind it is refused; an estimate is labelled as one.
Choose which statements go into the brief. A statement with no source is refused; each one you include carries its sources with it.
Escape-of-water claims: handler guidance
Choose the statements to include. Each one carries its sources into the brief.
0 of 6 statements included · 1 held back for lack of a source.
0 statements are ready with a source; 1 was left out because no approved source supports it.
Guidance that handlers will follow should state only what the claims manual and the policy wording support [S1][S2]. A plumber's report on every claim appears in no approved document, so it is not given as a rule; if it is wanted, it is a decision for the claims manager, not a statement of fact.
0 statement(s) are labelled as estimates; the settlement time is calculated from last year's claims and says so [S3].
Relies on: S1 · Claims manual, property section (fictional)S2 · Home policy wording (fictional)S3 · Settlement times, last year (fictional)
The claims technical lead with a claims manager decides. Approving releases this text as a draft procedure for review. It does not become the approved version until a second person approves it, and it decides no claim.
Not ready. Choose at least one supported statement for the brief first.
Not done here. It does not decide any claim and does not add a rule that the approved documents do not contain.
Work out which duties a new travel product brings
- What happened
- Larkfield will sell single-trip travel insurance through a comparison website.
- The question
- Which duties does the product bring, who owns each, and what is still unknown? Asked by: Head of compliance.
Work out which duties a new travel product bringsAnswer what is true of the product. A duty whose questions are not all answered stays undetermined; nothing is assumed.Open
Answer what is true of the product. A duty whose questions are not all answered stays undetermined; nothing is assumed.
Answer the questions about the organisation. Each rule becomes applicable, not applicable, or undetermined until the questions it depends on are answered: nothing is assumed.
Obligation Where Status Evidence and owner Clear product information before purchase
Synthetic basis: sales conduct frameworkSales conduct (synthetic label) UndeterminedNeeds: Will the product be sold online without personal advice None needed Handling of health information
Synthetic basis: personal data frameworkPersonal data (synthetic label) UndeterminedNeeds: Will customers' health information be collected None needed Oversight of a sales partner
Synthetic basis: distribution frameworkSales conduct (synthetic label) UndeterminedNeeds: Will sales go through a third-party website None needed Permission to sell cover abroad
Synthetic basis: cross-border selling frameworkCross-border (synthetic label) UndeterminedNeeds: Will cover be sold to customers in another country None needed Oversight of an outsourced claims handler
Synthetic basis: outsourcing frameworkOutsourcing (synthetic label) UndeterminedNeeds: Will claims be handled by an outside assistance company None needed Medical screening disclosures
Synthetic basis: sales conduct frameworkSales conduct (synthetic label) UndeterminedNeeds: Will the product be sold online without personal advice; Will customers' health information be collected None needed What a sales partner may see of customers' health answers
Synthetic basis: personal data frameworkPersonal data (synthetic label) UndeterminedNeeds: Will customers' health information be collected; Will sales go through a third-party website None needed - Applies
- 0
- Does not apply
- 0
- Undetermined
- 7
- Answered
- 0 of 5
0 of 7 duties apply to the travel product; 7 still depend on an answer.
Each duty names the evidence to hold and its owner: 0 kinds of evidence across 0 owners [S1].
Two answers combine in one place: health information collected through a partner's website needs a data-sharing record, which is why that duty is listed separately [S2].
Relies on: S1 · Travel product proposal (fictional)S2 · Group duty register (fictional)
The head of compliance decides. Approving fixes the duty register and its owners for the product. It does not say the product complies or allow it to be sold.
Not ready. 7 obligations are undetermined until the questions they depend on are answered. Answer them first; nothing is assumed.
Not done here. It does not interpret any law or confirm any permission: counsel and the compliance team map each duty to the rules that apply.
Test claim reserves against rising repair costs
- What happened
- Repair costs have risen faster than the reserve assumptions, and the finance committee wants to see what that does to the year.
- The question
- If repair costs and the number of open claims move, how far short of the expected cost is the reserve? Asked by: Chief actuary.
Test claim reserves against rising repair costsChange the four assumptions. The expected cost and the reserve's cover are recomputed, and a warning appears when the reserve falls short.Open
Change the four assumptions. The expected cost and the reserve's cover are recomputed, and a warning appears when the reserve falls short.
Change the assumptions. Every result and the answer below are recomputed from them, and a warning appears when a result crosses a stated limit.
- Expected cost of open claims
- GBP 9,331,200
- Shortfall against the reserve
- GBP 331,200
- Share of the expected cost the reserve covers
- 96.5%
On these assumptions the reserve does not cover the expected cost.
Expected cost is GBP 9,331,200 against a reserve of GBP 9,000,000: GBP 331,200 short, 96.5% covered.
The result is driven by repair-cost inflation and the number of open claims together [S1].
These are scenario figures for a committee to discuss, not a reserve recommendation: setting a reserve is the actuary's professional judgement [S2].
Relies on: S1 · Open claims and the repair-cost index (fictional)S2 · Reserving policy (fictional)
The chief actuary decides. Approving records these assumptions for the finance committee's pack. It does not change any reserve.
Ready.
Not done here. It does not set reserves or forecast losses: the actuary's judgement and the committee decide.
Read a reinsurance treaty for what it makes us do
- What happened
- The property reinsurance treaty is up for renewal, and the draft carries new conditions.
- The question
- Which clauses of the draft create obligations or limit cover, and which readings are uncertain? Asked by: Head of reinsurance.
Read a reinsurance treaty for what it makes us doDecide each highlighted clause. A reading the analysis is unsure of cannot be accepted; send it to counsel.Open
Decide each highlighted clause. A reading the analysis is unsure of cannot be accepted; send it to counsel.
Read each highlighted clause and accept it, reject it, or send it to counsel. A clause the analysis is unsure how to read cannot simply be accepted.
Property reinsurance treaty, renewal draft 2 (fictional) · 6 clauses read, 5 highlighted
1The Reinsurer's liability is limited to ninety percent of each loss above the retention of 500,000, up to an annual aggregate of 20,000,000.
medium risk Cover Reading clear
A retention and an annual aggregate limit cover
2The Cedant shall report any loss likely to exceed 250,000 within thirty days of becoming aware of it.
high risk Notice of loss Reading clear
A thirty-day reporting duty; late notice may reduce recovery
Obligation: The Cedant reports large losses (thirty days from becoming aware)
3The Cedant shall maintain underwriting standards no less strict than those provided to the Reinsurer at inception.
high risk Underwriting standards Reading uncertain
An open-ended undertaking tied to documents supplied earlier
Obligation: The Cedant keeps underwriting standards at least as strict as at inception
4This treaty excludes loss arising from any event the Reinsurer reasonably considers to be a cyber event.
high risk Exclusions Reading uncertain
An exclusion that depends on the Reinsurer's own view
5Premium is payable in four equal quarterly instalments.
6Any dispute shall be referred to arbitration.
medium risk Disputes Reading clear
Arbitration in place of the courts
- Accepted
- 0 (0 obligations)
- Rejected
- 0
- With counsel
- 0
- Undecided
- 5
5 clauses need a decision; 0 create obligations; 0 were sent to counsel.
The thirty-day notice clause and the underwriting-standards undertaking are the two that can reduce recovery after a loss [S1].
Two readings, which standards are meant and who decides what a cyber event is, are uncertain, so they go to counsel and are not accepted [S2].
Relies on: S1 · Property reinsurance treaty, renewal draft (fictional)S2 · Reinsurance buying playbook (fictional)
The head of reinsurance with counsel decides. Approving fixes the obligation list for the renewal negotiation and sends the unsure readings to counsel. It does not accept the draft.
Not ready. 5 highlighted clauses are still undecided. Accept, reject or send each to counsel first.
Not done here. It does not negotiate or accept terms and does not give legal advice.
Choose which line of business to grow
- What happened
- The group has capital to grow one line of business next year, and the board wants a recommendation.
- The question
- Which line should Larkfield grow next year, and does the answer survive different priorities? Asked by: Chief executive.
Choose which line of business to growChange how much each criterion matters. The ranking is recomputed, and the page says whether the leader would survive other weightings.Open
Change how much each criterion matters. The ranking is recomputed, and the page says whether the leader would survive other weightings.
Change how much each criterion matters. The ranking is recomputed, and the page tells you whether the leader would survive a different judgement.
- 1Pet insuranceAttractive margin and light capital; little experience in the team.Expected margin: 5Low use of capital: 5Low claims volatility: 4Fit with our skills: 2Distribution ready: 23.87
- 2Home insuranceOur core skill, with channels already in place.Expected margin: 3Low use of capital: 4Low claims volatility: 3Fit with our skills: 5Distribution ready: 53.83
- 3Small-business propertyBetter margin; needs more broker relationships.Expected margin: 4Low use of capital: 3Low claims volatility: 3Fit with our skills: 4Distribution ready: 33.43
- 4Motor fleetLarge premiums, heavy capital and volatile claims.Expected margin: 3Low use of capital: 2Low claims volatility: 2Fit with our skills: 3Distribution ready: 42.70
The leader would change if Expected margin (counted half as much). Treat the order as sensitive to that judgement.
Leader's margin over the next option: 0.04. The leader can change under another weighting.
With these weights the favoured line is Pet insurance (score 3.87).
The order could change under the weightings tested, and would change if Expected margin (counted half as much) [S1]. The margin between first and second place is 0.04.
A ranking orders the options on the scores written in the briefs; it does not weigh a line's reputational or strategic fit beyond what those scores say [S2].
Relies on: S1 · Line-of-business results and capital use (fictional)S2 · Growth option briefs (fictional)
The chief executive decides. Approving records the favoured line as the recommendation to the board. It does not commit capital or hire anyone.
Ready.
Not done here. It does not decide: the board owns the decision, and a score is an input to it.
Where a person decides, and what is never done
Every example above ends with a named person approving it. Approving means exactly what is written here, and nothing more.
- SOP IntelligenceDecides: The claims technical lead with a claims managerApproving lets: Approving releases this text as a draft procedure for review. It does not become the approved version until a second person approves it, and it decides no claim.Never: It does not decide any claim and does not add a rule that the approved documents do not contain.
- ComplianceDecides: The head of complianceApproving lets: Approving fixes the duty register and its owners for the product. It does not say the product complies or allow it to be sold.Never: It does not interpret any law or confirm any permission: counsel and the compliance team map each duty to the rules that apply.
- Financial IntelligenceDecides: The chief actuaryApproving lets: Approving records these assumptions for the finance committee's pack. It does not change any reserve.Never: It does not set reserves or forecast losses: the actuary's judgement and the committee decide.
- Legal IntelligenceDecides: The head of reinsurance with counselApproving lets: Approving fixes the obligation list for the renewal negotiation and sends the unsure readings to counsel. It does not accept the draft.Never: It does not negotiate or accept terms and does not give legal advice.
- Executive IntelligenceDecides: The chief executiveApproving lets: Approving records the favoured line as the recommendation to the board. It does not commit capital or hire anyone.Never: It does not decide: the board owns the decision, and a score is an input to it.
Always a person in insurance
- A claims manager decides whether a claim is paid; the platform never does.
- An underwriter decides the terms offered on a risk.
- Counsel decides how a disputed claim is answered.
The capabilities behind these examples
- Create a procedure from the sourceWriting a clear, complete procedure from scratch is slow, and the written version often differs from what people actually do.
- Review and approve, as peopleA procedure that nobody accountable has approved is a liability, however well it reads.
- Ask questions of the approved proceduresPeople ask colleagues instead of reading, because finding the answer in a procedure is slow, and the colleague may be wrong.
- Regulatory Applicability IntelligenceWork out which obligations may apply to this business from its legal entities, activities, industry, locations, workforce and other verified facts, and show each as…
- Vendor and Third-Party RiskTrack suppliers and subprocessors, their security assurances, data-access arrangements, contract controls, expirations and exceptions.
- Financial Scenario and Sensitivity ModelingModel pricing, hiring, investment, expansion, cost-reduction and operating scenarios with explicit variables and assumptions kept distinct from facts.
- Margin and Cost-Driver ExplanationsTrace material changes in margin, spend, profitability and unit cost to the governed measures and source-backed drivers behind them.
- Contract IntelligenceExtracts obligations, unusual clauses, renewals, liability, indemnity, pricing, confidentiality and data-processing exposure from contracts, compared against approved…
- Legal Drafting and Negotiation SupportReviewed first drafts, redlines, clause comparisons, playbooks and negotiation questions.
- Decision Options ComparatorSide-by-side comparison of recorded options against stated criteria, with evidence and uncertainty for each cell.
- Capital Allocation OptimizationCompares allocation options within a stated budget and constraints by a documented method.
All industries · All demonstrations · Ask for a demonstration on your own sector
The other industries
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- RetailStore routines that are the same on a busy Saturday in every shop.
- LogisticsDepot and driver procedures that hold across sites, subcontractors and seasons.
- TechnologyRunbooks and release routines that new engineers can follow and leaders can trust.
- EducationSafeguarding and operational routines every member of staff can find and follow.
- Professional servicesEngagement methods captured once, so quality does not depend on who is staffed.