Glossary
The claims decisioning glossary.
Plain-English definitions of the terms behind claims leakage, liability and decision intelligence — written for the people who work the file.
Claims audit trailA claims audit trail is a complete, time-stamped record of how a claim was decided: which rule was applied, at what confidence, on what evidence, and confirmed by whom. It is what lets a decision hold up in a dispute or an audit.Claims consistency analyticsClaims consistency analytics measures whether similar claims are decided the same way across adjusters, teams and time. It surfaces the variation in decisions that drives leakage and disputes, which averages tend to hide.Claims decision benchmarkingClaims decision benchmarking compares an adjuster’s or team’s decisions against a reference, whether the team’s own best practice, precedent, or a validated model, to find where calls drift and where to target training and process fixes.Claims experience gapThe claims experience gap is the widening shortfall between the volume and complexity of claims and the experienced staff available to handle them. As veteran adjusters leave faster than new ones are trained, judgment thins out across the industry.Claims knowledge transferClaims knowledge transfer is moving the judgment, conventions and hard-won know-how of experienced adjusters to newer staff, so the expertise behind good decisions does not leave when a veteran retires.Claims leakageClaims leakage is money an insurer overpays on claims through avoidable mistakes, like a coverage call that was too generous or a recovery nobody pursued. On a typical book it runs 5–10% of everything paid out.Claims leakage detectionClaims leakage detection is finding the avoidable overpayments in a book of claims, such as wrong splits, missed recoveries and drifting reserves, ideally before the money leaves rather than in a later audit.Claims reasoning captureClaims reasoning capture is recording why an adjuster made each decision, not only what they decided. It turns human judgment into a structured record that can be reviewed, benchmarked and learned from.Claims staffing crisisThe claims staffing crisis is the industry-wide shortage of experienced claims adjusters, as retirements, turnover and burnout outpace hiring and training. It leaves teams under-resourced against rising claim volumes.Claims triageClaims triage is sorting incoming claims by complexity, severity and risk so each goes to the right path: a fast track for the simple ones and an experienced handler for the hard ones, instead of treating every claim the same.Claims workflow automationClaims workflow automation uses software to run the steps of a claim, such as intake, routing, data entry, document requests and status updates, without manual handling, so handlers spend less time on process and more on decisions.Combined ratioThe combined ratio is an insurer’s core profitability measure: incurred losses plus expenses divided by earned premium. Below 100% is an underwriting profit. Above 100% means claims and costs came to more than the premium.Convention matchingConvention matching is applying a motor insurance fault convention, the agreed grid (barème) that assigns liability to standard accident scenarios, to a specific claim, so the split is set consistently across insurers.Coverage verificationCoverage verification is confirming that a policy actually covers a reported loss: the right policy in force at the loss date, the correct endorsements applied, and no exclusion that bars the claim, before it proceeds.
Decision intelligenceDecision intelligence is software that helps a claims team make a better call on each claim. It reads the file, applies the team’s own rules, and gives the adjuster a scored recommendation to accept or override, rather than deciding for them.Decision-readyA claim is decision-ready when everything an adjuster needs to make the call is gathered, structured and cross-checked: the file is complete, the evidence is attached, and nothing is left to chase.Document extractionDocument extraction uses AI to read the unstructured documents a claim arrives as, such as FNOL forms, statements, estimates and photos, and turn them into structured data an adjuster or system can act on.
FNOL (first notice of loss)FNOL, or first notice of loss, is the first report an insurer receives that a loss has happened. It is the moment a claim begins, and how well the FNOL is captured sets up every decision that follows.FNOL automationFNOL automation captures and structures the first notice of loss automatically, through voice, chat, web or app intake, so a claim opens as a clean, structured record instead of an unstructured phone note.
Independent adjuster (IA)An independent adjuster is a claims adjuster who works for insurers on a contract or per-claim basis rather than as an employee. Insurers draw on them for overflow, catastrophes, or specialist claims.Insurance ontologyAn insurance ontology is a structured model of the concepts in insurance, such as policies, perils, parties, coverages and decisions, and how they relate, so software and AI can reason about a claim with shared, unambiguous meaning.
Liability decisionA liability decision sets who is at fault for a loss and in what proportion, known as the split. It drives the payout, the recovery, and how well the claim holds up if it is disputed.Loss ratioThe loss ratio is claims paid plus reserves divided by earned premium. It is the share of premium that goes back out as claims, and accuracy on every decision is what keeps it from drifting.
SOP encodingSOP encoding turns a claims team’s standard operating procedures, the guidelines and exceptions that govern how claims should be handled, into rules a system runs on every claim. The process gets applied consistently instead of sitting in a PDF nobody opens.Straight-through processingStraight-through processing (STP) is handling a claim end to end with no manual intervention, from first notice to settlement, for claims simple and clear enough to decide automatically. It is measured as the share of claims settled without a human touch.SubrogationSubrogation is an insurer’s right to recover money it paid on a claim from the party who was actually at fault, or from their insurer. Done well, it recovers payouts that would otherwise be lost.