A Framework for monitoring operational risks in claims processing: case of Sanlam Insurance Company
Date
2022
Authors
Maraga, Emma Ikonge
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Monitoring operational risks in the claim processing continue to present a challenge to many insurance firms. This is largely due to poor approaches used to monitor operational risk and many insurance firms have experienced capital losses, brand and reputation erosion. This study sought to propose a framework for monitoring operational risks in the claim processing using the decentralized Blockchain Technology taking a case study of Sanlam Insurance Company. To develop the proposed framework, the study was based on specific objectives that include: investigate the operational risks associated with the claims processing in the company; review the indicators of operational risks in claims processing in the company; review how information communication technology has been utilized to monitor operational risks by the company. The study adopted a qualitative research methodology with the primary data collection instrument being a semi-structured interview. Descriptive and inferential data analyses were conducted. From the study human error was the most prevalent operational risk (100%) followed by system failures (77%), accounting errors (55%) and fraud (44%). It was established that customer dissatisfaction (66.7%), IT failure (55.6%), and errors (44%) were the leading operational risk indicators. Further the study established the existence of a positive relationship between the operational risk indicators and the type of operational risks experienced by the insurance company. There was also a high level of adoption of ICT technology in the company (100%). The immutability characteristics of the Blockchain was considered more important by the respondents at an index score of 1.33 (33%). Based on the findings, the researcher proposes a framework that utilizes Blockchain Technology’s immutability characteristics to monitor the claims processing in the company. The proposed framework would provide clients and insurance agents with the means of managing claims in a transparent, irrefutable and responsive manner.
Description
A Research dissertation submitted to the Strathmore University Business School in partial fulfillment for the Master of Science in Development Finance of Strathmore University
Keywords
Operational risks, Claims processing, Sanlam Insurance Company