Turnaround Time (TAT)

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Definition

Turnaround time is the time to complete a process or request for insurance claims or policy issuance. 

Description

When you travel by air, you have to go through a check-in process.The entire process takes a little bit of time which is why the airlines company requests you to arrive at the airport before time. They know that before the final departure, the process of scanning the luggage and weighing it will take some time.

Similarly, in the insurance world, an insurance company receives thousands of applications daily for both new policy purchase as well as for the claims. To prevent annoying the customers, it is important that each process follows a turnaround time. It indicates the difference of time when the service request enters a queue and the time it is completed.

In businesses that involve millions of people and interaction with them, time management is crucial. It leaves both the parties in good space without affecting the quality of service offered. If the TAT is less, an insurance company's work efficiency is better. In addition, lesser turnaround time increases the credibility of the insurer and the trust of the customers.

Example

Ravi was very happy with the service of XYZ Life Insurance Company Limited. 

He filed to receive a death claim against his father’s term insurance policy. After his fathers death, Ravi’s family needed instant money to pay off the extended loans of his father’s business.

The insurer’s TAT was mentioned for 2.5 days. After the claim was filed the insurance representative contacted Ravi within a day and obtained all necessary documents required for claim processing. The claim was processed and the death benefit was paid to Ravi in 4 days. For which, the insurance company established trust in its customers.