10. A typical claims adjuster has a very complex job. He or she is responsible for settling claims fairly, while protecting the insurance company's interest. Depending on the com- plexity of the assigned claims, work on an individual claim can range from several days to several years. Each adjuster has a mix of claims assigned. Except for payments to outside authorities and final settlements, costs of handling claims have not been determined. Operating expenses incurred by claims adjusters have typically been assigned to product lines (policy coverage offered) in an arbitrary fashion. To determine if their policy premium structure is appropriate, management is inter- ested in applying activity-based analysis. They have come to you for your assistance. Upon interviewing claims adjusters and their supervisors, you le performed on a claim include: investigating the facts of the claim, evaluating the amount of damages incurred; managing outside authorities such as accident experts, attorneys, and medical authorities; documenting facts and damages; negotiating settle- ments with claimants; making court appearances; processing payments; and estimating amounts needed to cover future payments. The amount of time and resources devoted to each activity depends on the size and nature of the loss as well as on the legal jurisdic- tion for the claim. Your job is to determine the cost and time required by the various activities for each type of policy coverage offered by the insurance company. Required: 1. What drives resource use on a claim? 2. What are the potential resources consumed by a claim? 3. Prepare an assumed activity flow for a claim from the above description. 4. How would you analyze the time spent and resources consumed by claims adjusters on these activities? Remember that each adjuster has a mix of claims, with work on claims ranging from several days to several years. 10. A typical claims adjuster has a very complex job. He or she is responsible for settling claims fairly, while protecting the insurance company's interest. Depending on the com- plexity of the assigned claims, work on an individual claim can range from several days to several years. Each adjuster has a mix of claims assigned. Except for payments to outside authorities and final settlements, costs of handling claims have not been determined. Operating expenses incurred by claims adjusters have typically been assigned to product lines (policy coverage offered) in an arbitrary fashion. To determine if their policy premium structure is appropriate, management is inter- ested in applying activity-based analysis. They have come to you for your assistance. Upon interviewing claims adjusters and their supervisors, you le performed on a claim include: investigating the facts of the claim, evaluating the amount of damages incurred; managing outside authorities such as accident experts, attorneys, and medical authorities; documenting facts and damages; negotiating settle- ments with claimants; making court appearances; processing payments; and estimating amounts needed to cover future payments. The amount of time and resources devoted to each activity depends on the size and nature of the loss as well as on the legal jurisdic- tion for the claim. Your job is to determine the cost and time required by the various activities for each type of policy coverage offered by the insurance company. Required: 1. What drives resource use on a claim? 2. What are the potential resources consumed by a claim? 3. Prepare an assumed activity flow for a claim from the above description. 4. How would you analyze the time spent and resources consumed by claims adjusters on these activities? Remember that each adjuster has a mix of claims, with work on claims ranging from several days to several years