The claims handling process of engineering insurance in South Africa

Abstract

Due to technological developments, the complicated world of engineering and its associated products are continuously becoming more specialized. Short-term insurers provide engineering insurance to enable the owners and operators of engineering assets to combat the negative impact of the associated risks. It is, however, a huge challenge to the insurers of engineering insurance to manage the particular risks against the background of technological enhancement. The skills gap in the short-term insurance market and the engineering environment may be the main factor which inhibits the growth of the engineering insurance market. The objective of this research embodies the improvement of financial decision-making concerning the claims handling process of engineering insurance. Secondary as well as primary data were necessary to achieve the stated objective. The secondary data provided the background of the research and enabled the researchers to compile a questionnaire for the empirical survey. The questionnaire and a cover letter were sent to the top 10 short-term insurers in South Africa that are providing engineering insurance. Their perceptions should provide guidelines to other short-term insurers who are engaged in engineering insurance, as they are regarded as the market leaders of engineering insurance in South Africa. The empirical results of this research focus on the importance of various claims handling factors when assessing the claims handling process of engineering insurance, the problem areas in the claims handling process concerned, as well as how often the stipulations of engineering insurance policies are adjusted to take the claims handling factors into account.