The term subrogation used to bring about mixed emotions for adjusters. Now, with more resources available, identifying subrogation potential claims and meeting recovery goals are a higher priority for most companies. The subrogation landscape has continued to evolve beyond traditional insurance claim business models over the past 10 years. The formation of the National Association of Subrogation Professionals in the late 90s has contributed in part to a new group of thinkers who are visionary and results oriented in the subrogation space. The architecture and vision put on paper a few years ago has now become reality in subrogation practice. The incorporation of new technology, performance indicators, and alternative funding now offer carriers, captives and self-insured entities the ability to engineer their Subrogation performance and results.
If you can remember back when subrogation was handled manually, prioritized by the tallest pile of files or mail, and recovery goals predicted based on last years recovery numbers, you know we have come a long way. (If you are still handling subrogation as mentioned above I suggest that you read on..) Unlocking capital through subrogation assets has now gained a higher status in most companies as subrogation recovery and monetary assets, together, have a certain ring to CFOs and Investment Executives. Because of the higher profile of subrogation, new ways of doing business have readily been embraced by leading edge companies.
Technology State of the art technology is now available to efficiently expedite any type of subrogation claim. Subrogation operations are now able to process in a paperless environment through imaging. Identifying subrogation opportunities through the use of technology allows companies and captives to increase subrogation potential claims although having trained adjusters on the lookout for subrogation claims is still preferred over reviewing closed or flagged files.
Prioritizing cases and tracking progress through new technology has reduced recovery cycle times by increasing efficiencies in workflow. There are platforms and software that incorporate scoring based on subrogation potential, liability characteristics, type of claim, statutes of limitations, state laws and claim characteristics. Scoring, along with adverse profiling can assist companies and captives in predicting accurate recovery results and in decreasing cycle times.
Performance Initiatives As a result of earlier benchmarking studies by the Ward Group and the new Auto and Property and Workers Compensation Benchmarking studies sponsored by the National Association of Subrogation Professionals (NASP information is located at www.subrogation.org), companies now have a roadmap to achieving at least average or above average recovery goals based on their lines of business and particular size and state. Adjusters and Subrogation personnel now have higher standards to meet to achieve goals and utilize technology tools. Subrogation expertise and training can be achieved through educational opportunities and certification through NASP.
Leveraging alternative funding to capitalize subrogation assets is an attractive alternative to companies looking to utilize capital for new business initiatives, credit enhancement, cost reductions, guaranteed recovery or for financing capital surplus.
Through scoring technology and predictable outcomes, along with benchmarking, Subrogation assets can now be capitalized in advance of recovery through alternative funding.
Industry Trends As efficiencies improve and technology is utilized, some companies have already decided to utilize outsourcing resources for improving performance in subrogation.
Employing various work queues in subrogation can separate tasks that traditionally have been handled by internal adjusters. By doing so, employees who are skilled in negotiation will not be slowed by assembly of evidentiary material, or by manually ordering reports, or following up on money to be collected on settlements.
Expanded resources in subrogation will continue to allow companies and captives to become more efficient, to lower their costs of recovery, reduce cycle times, increase recovery results and ultimately engineer their subrogation performance. Captives and companies who embrace partial or complete outsourcing partnerships may more rapidly achieve their desired goals in recovery, as opposed to allowing the subrogation function to remain with the third party administrator, whose core expertise is claims adjustment, medical cost control and management of disability. Those entities who involve executive management early on to help educate and bridge the gaps of the benefits of various subrogation resources and desired financial benefits will be well on their way to building an effective subrogation program.
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