Claims-Servicing SLAs and the Commission That Pays for Them

Ask a broking firm what its claims desk costs and you get a shrug and a headcount. Four people, maybe seven, sitting between the client's plant manager and the insurer's claims hub, answering the phone at 11pm when a godown floods. No invoice attaches to that function. The desk is paid out of placement commission, which arrives once, at inception, for work that then runs the eighteen months a contested fire claim takes to close. That is the honest link between this post's title and its subject, stated once so it need not be restated: the money comes in at placement, the work goes out across the year, and the desk absorbs the mismatch.

Most Indian broking firms run claims on judgement and goodwill. A senior claims person carries the difficult files in their head, juniors chase documents by WhatsApp, and the client learns where a claim stands by ringing the relationship manager, who rings the claims person, who rings the insurer. It works until that person is on leave, or until the firm crosses roughly 400 claims a year and no single head holds them all. Then the firm needs an operating standard: named clocks, named owners, an escalation path with authority attached, and a report that surfaces the file everyone forgot.

A companion post on the servicing evidence base covers the remuneration-evidence angle. This post is narrower: running the desk to a standard, this quarter, whatever the pay regime turns out to be.

A commercial claim passes through six intervals: three the broker's, two the insurer's, one shared. Firms get into trouble by measuring all six as one number, then discovering they cannot fix any of it.

1. Intimation to acknowledgement. How long before a human replies with a reference number and a named handler? Entirely yours. A defensible standard is 4 working hours normally, 60 minutes for anything the client flags as material. It is also the only clock the client emotionally remembers.
2. Acknowledgement to registration with the insurer. The claim is entered in the firm's register, checked against the schedule for cover, period and sum insured, and intimated to the insurer with loss particulars. Yours. Same day, or 24 hours where cover needs checking.
3. Registration to surveyor appointment. The insurer's clock. The IRDAI Master Circular on Protection of Policyholders' Interests (5 September 2024) requires allocation of a surveyor within 24 hours of the claim report. Your job is not to hit this number. It is to know on hour 26 that it was missed, and to have someone to call.
4. Document request to document delivery. Shared, and the one that quietly eats months. The desk's clock runs from receiving the request to either supplying the document or telling the surveyor in writing that it does not exist and why.
5. Survey to report. The surveyor's clock, the same circular prescribing the report within 15 days of allocation, with an outer limit for special and complicated claims. Yours to chase, not to control.
6. Settlement decision to money in the account. Partly insurer, partly discharge voucher and bank detail work the desk can lose a fortnight to.

The split is the operating point. Clocks 1, 2 and 4 are the desk's own performance, reported with no insurer excuse available. Clocks 3, 5 and 6 are chase performance, measured by whether the follow-up was made on the day it fell due. A single sixty-day average across all six tells you nothing you can act on by Friday.

An escalation matrix that lists job titles is decoration. The one that works lists people, ages and powers: the trigger as claim age against the clock that slipped, who moves on both sides, and what that person is allowed to do. The third column is the one most firms omit and the only one that makes escalation real.

A workable ladder:

• Day 2 on a missed surveyor allocation. The claims executive emails the insurer's claims hub, copying the branch servicing officer. Authority: none needed, this is a chase.
• Day 7 with no surveyor visit. The claims manager calls the insurer's regional claims head by name. Authority: to ask for reallocation to a different surveyor.
• Day 30 with the report unfiled, or day 21 on a document loop that keeps reopening. The head of claims raises it with the insurer's national claims head. Authority: to commit to a joint site meeting, and to put the account's renewal on the table.
• Day 60, or any repudiation on a material loss. Principal officer to the insurer's chief of claims, with the client's risk manager present. Authority: to instruct external counsel, to prepare an Ombudsman or forum reference, and to say so.

Two details decide whether this works. The insurer-side names must be current, so someone refreshes the matrix quarterly; claims hub personnel in Indian general insurers rotate faster than broker staff assume. And the ladder must fire automatically. If escalation waits on an executive deciding a file feels stuck, it will not happen, because the executive who owns the file is the last person who wants to declare it stuck. The ageing report escalates, not the person.

Claims MIS at most firms means a list of open claims with amounts. That is an inventory, not a management report. Four views turn it into one.

Ageing by blocking status, not by age alone

A claim 90 days old awaiting a surveyor's report on a complex business interruption computation is healthy. One 90 days old awaiting the client's stock statement is a failure with the firm's name on it. Bucket open claims by days (0 to 15, 16 to 45, 46 to 90, 91 to 180, 180 plus) and cross-cut by the status actually blocking: awaiting document from client, awaiting document from third party, awaiting surveyor visit, awaiting surveyor report, awaiting insurer decision, awaiting discharge voucher, awaiting payment. The cell counts tell the head of claims where next week goes.

The stuck-claim definition

Define stuck arithmetically so nobody argues about it: no recorded event on the file for 14 days, or age exceeding twice the median for its status band. Every claim meeting the test appears on a weekly list with an owner and a required next action.

First-response compliance, and reopened claims

First-response compliance is the percentage of intimations acknowledged inside the standard, measured monthly, by handler. It predicts client complaints better than settlement outcomes do, because clients forgive slow insurers and do not forgive silence from their broker.

Reopened claims are files closed and reopened within twelve months, each recorded with a reason: a supplementary head of loss never quantified, salvage unaccounted for, an excess applied twice, a client who accepted a settlement they did not understand. Reopening is expensive, almost always a desk failure rather than an insurer failure, and the metric most likely to be absent from the report, because closure feels like an ending.

At appointment, do three things within 48 hours. Confirm the surveyor's licence category and line of business against the appointment. Send an unprompted first pack: policy schedule, wording with endorsements, loss narrative, site contact with mobile number, preliminary photographs if any. And ask in writing for the full document list at the outset, rather than receiving it in three instalments across six weeks. The staged document request is the commonest cause of drift on Indian commercial claims, and it is partly a broker failure: a desk that asks for the complete list on day one usually gets one.

The chase cadence should be scheduled rather than reactive: a short written status request weekly naming the outstanding item, and a diarised call at the report's due date. Written matters, because a phone chase leaves no trace when the file later goes to escalation or to a forum.

On the report, the desk's job changes from chasing to reading. Three things get checked line by line before anything reaches the client. The basis of assessment, since reinstatement value and market value produce very different numbers and the applicable basis is a wording question rather than a surveyor preference. The underinsurance computation, where the average clause is applied against a sum insured that may have been correct at inception. And the deductions, which should each trace to a policy provision rather than a convention.

Where the desk disagrees, it disputes in structured form: a written representation citing the clause, the error and the corrected figure, with the client's evidence attached. Contested findings are treated at length in the broker claims advocacy playbook. The desk-level point is narrower. A surveyor's report is a professional opinion, not an adjudication, and a desk that forwards it unread has done the client's photocopying rather than their broking.

Large losses

Above a material threshold the ordinary clocks stop describing reality. Multiple surveyors are appointed, forensic and accounting specialists come in, the reinsurer takes an interest, and the report timeline extends by regulation for special and complicated claims. The answer is not to pretend the clocks apply. It is to switch the file to a different regime: a named partner owning it, a fortnightly written status whether or not anything has moved, and an interim-payment position pursued from the first month rather than raised at settlement. A client waiting on a large fire claim measures the firm by whether the update arrives on schedule, not by whether the news is good.

Co-insured programmes

A programme shared across three insurers has one leader and two followers, and the followers' clocks do not run in step with the leader's. The leader appoints and settles; the followers pay when their internal approvals land, weeks later on identical paperwork. Record the co-insurance shares on the claim file at intimation rather than looking them up at settlement, and track each follower as a separate payment line. The commonest failure is a claim reported closed because the leader has paid its 50 percent while 50 percent is still outstanding.

TPA-routed health

Group health runs on a different rhythm, through a third-party administrator with its own network, pre-authorisation desk and document standards. Property-lines clocks do not transfer. Health-heavy accounts also change the economics of the desk, because one group mediclaim account can generate more claim events in a month than a manufacturing account generates in years. That load, and the separate servicing fee some firms charge to carry it, is the subject of a companion post on TPA-heavy accounts and the servicing fee. For SLA purposes the rule is that these accounts get their own standard, tracker and ageing view, and never share a report line with fire and marine.

Broking service agreements in India tend toward two failure modes: they say nothing about claims beyond the word assistance, or they promise settlement outcomes the firm has no power to deliver. Commit instead to what the desk controls:

• Acknowledgement of intimation within a stated window, with a named handler and a reference number.
• Registration with the insurer within a stated window of receiving complete loss particulars.
• A written status update at a stated frequency for any claim open beyond a stated age, sent whether or not there is news.
• Notification whenever an insurer or surveyor deadline is missed, with the escalation the firm has initiated.
• A named escalation contact at the firm, by grade, reachable when the ordinary handler is not.
• A quarterly claims report covering ageing, stuck files and reopened claims on the client's account.

Do not commit to settlement timelines, settlement ratios, or any percentage of claimed amount recovered. The firm does not appoint the surveyor, does not decide the claim and does not sign the cheque. A promise of a 45-day settlement on a commercial fire claim is a promise about someone else's behaviour, and the first large loss converts it into a dispute with the client about the broker rather than a dispute with the insurer about the claim.

Write the exceptions into the same clause as the promises. Name the large-loss threshold above which standard timelines give way to the fortnightly-update regime, state that co-insured claims settle in tranches, and carve TPA-administered health out to its own annexure. A standard with honest exceptions survives a bad claim; a standard without them is discovered to be untrue at the moment the client is angriest.