Can a company ( an insurance company , for example) , which normally does collecting information necessary for the completion of a service (calculating the risk probability..), delegate the task to an external company that will do this job for her, but without the external company gives the details to the insurer but only the conclusion :
An insurer may provide an insurance service on the basis of a risk ananlysis done by an external risk analysis company but without the external company providing the details of his analysis but only its conclusion .
For example, the external company would say:
"The probability of occurrence of this risk there is .. " (but calculation methods are unknown to the insurer ..)
Generally, what if (for confidentiality reasons..) a compagny must base solely on the findings (not knowing details) of another entity to work ?
I imagine for example that there might be a 2nd external company that would confirm ( testify ) the right conclusions of the first. .
Can the compagny (the insurer in this case) base him on these two conclusions (without knowing the details) to provide the insurance service ?
Did this method already been done (even in other sectors ) and could it be done ?
Posted: 17 Apr 2014 03:13 Post Subject:
Aside from the fact that your question is nearly impossible to follow, I think you are asking about how an insurance company underwrites the risks it insures.
Agents and brokers submit applications for insurance. Underwriters look at those applications and decide, "Is this risk insurable or not?" If they don't have enough information in the application, they can request any of a variety of additional bits of information. In life insurance, for example, they will order blood and urine profiles, investigative consumer reports, medical exams, EKGs, MIB reports, etc. These are all "third party" sources of information, and there is nothing unlawful about using them.
Most insurance companies do not have sufficient field workers to do this sort of underwriting, and the industry relies heavily on third party reports and inspections.
In property and casualty insurances, particularly commercial risks, the insurance companies generally rely on third party inspections (on site or drive-by) to obtain an independent assessment of the risk. Agents are notorious for submitting applications for unacceptable risks, just so they can collect a commission check. Independent inspectors provide an unbiased view of the risk which can be highly valuable to the insurance company. Then again, some third party inspectors don't do a very good job either and leave the insurance company exposed to claims it would prefer not to cover.
I did those kinds of inspections for a couple of years in the early 1990s for a company that contracted its inspection services to three or four major insurers. I made good money doing 10-30 inspections per week, and the insurance companies got good reports on which they could choose to accept or decline a risk.
In one instance, I identified a clear risk of fire damage from an adjacent occupancy sharing a common wall. Before the insurance company could get off the risk, a fire did indeed occur and the business I inspected suffered smoke and water damage that the insurance company had to pay for. But I still got a commendation from the insurance company for properly recognizing and timely reporting the risk exposure.