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Jacoline van Jaarsveld ORCID logo, Frederik J. Mostert ORCID logo, Jan Hendrik Mostert ORCID logo


Liabilities play a very important financial role in business operations, professional service providers as well as in the personal lives of people. It is possible that a single claim may even lead to the bankruptcy of the defendant. The claims handling process of liability insurance by short-term insurers is therefore very important to these parties as it should be clear that liability claims may have enormous and far-reaching financial implications for them. The objective of this research paper embodies the improvement of financial decision-making by short-term insurers with regard to the claims handling process of liability insurance. Secondary data was initially studied which provided the basis to compile a questionnaire for the empirical survey. The leaders of liability insurance in the South African short-term insurance market that represented 69.5% of the annual gross written premiums received for liability insurance in South Africa were the respondents of the empirical study. The perceptions of these short-term insurers provided the primary data for the vital conclusions of this research. This paper pays special attention to the importance of the claims handling factors of liability insurance, how often the stipulations of liability insurance policies are adjusted by the short-term insurers to take the claims handling factors into consideration, as well as the problem areas which short-term insurers may experience during the claims handling process. Feasible solutions to address the problem areas are also discussed.

Keywords: Adjustment of Policy Stipulations, Claims Handling Factors, Claims Handling Process, Liability Insurance, Problem Areas

How to cite this paper: Jaarsveld, J., Mostert, F J., Mostert, J H. (2015). The claims handling process of liability insurance in South Africa. Risk governance & control: Financial markets & institutions, 5(1-1), 133-140.