What does principle 4 address in the insurance process?

Principle 4 in the insurance process specifically addresses claims management and large loss monitoring. This principle is critical because it ensures that insurers effectively manage claims when they arise, facilitating a structured approach to assessing losses and determining compensation. Proper claims management helps maintain customer trust and satisfaction, as it demonstrates the insurer's commitment to handling policyholder claims efficiently and fairly.

Additionally, monitoring large losses is vital for insurers to understand better their risk exposure and to implement strategies aimed at reducing the impact of significant claims on their financial stability. By focusing on claims management and large loss monitoring, this principle supports the overall financial health of the insurance organization and reinforces its capacity to remain solvent and competitive in the market.