CLIENT SUBROGATION PORTAL

For over 100 years the Federal role in insurance regulation has been limited to the states by the U.S. Supreme Court.

However, there are several legislative proposal making their way to Congress that are seeking to change that; to regulate the insurance industry on the National level.

What does that mean for the industry and our customers?

FOR INSURANCE CARRIERS it means increased costs to comply with regulation and it makes it more difficult to challenge questionable claims.

FOR CUSTOMERS it means increased premiums. Studies show that increased regulations in auto and homeowners insurance, for example, lead to higher consumer premiums and consumers normally do not benefit from regulations.

I am interested in hearing what others think about insurance regulations going to the National level.

With meteorologists predicting an active 2011 hurricane season, now is the time to begin preparing your policyholders on ways to protect themselves and their property. It is also important that insurance companies located near vulnerable coastlines prepare.

The National Oceanic and Atmospheric Administration (NOAA) predict that the 2011 Atlantic hurricane season will be a busy one. NOAA expects 12-18 named storms.
Of those, 6-10 are expected to become hurricanes with winds in excess of 74 mph, and 3-6 are predicted to become major hurricanes, category 3, 4 or 5 with sustained winds of at least 111 mph.

Acclaim Resource Partners has compiled a list of suggestions to prepare your business for hurricane season:

1.    Protect Your Employees: The most important resources you need to safeguard are your employees. Employee safety should always come first. In preparation of hurricane season your employees should be made aware of what to do in the event of a hurricane warning, be familiar with your business recovery plan and know how to communicate with you once the storm passes.

2.    Update Your Business Recovery Plan: It is critical that businesses located near a coastline, one that frequently receives hurricane watches and warnings, update their business recovery plan annually. Having a good business resumption plan in place, one that you have rehearsed and tested, and shared with your employees, may make the difference between your business making a full recovery or having to shut down.

3.    Communications Plan: As part of your business recovery plan businesses of all sizes need to have a plan in place to communicate with your employees, key vendors and customers when a hurricane warning is issued and more importantly, after the storm has passed.

Employee Communication. Establish a clear process for communication with your employees and plan how you will contact one another in different scenarios. For example, many businesses have a pre-arranged rendezvous point or a time for employees to contact their supervisor following a storm.

If damage is severe employees may need a photo ID and letter of authorization allowing them to bypass authorities and enter the business. Preparing these documents in advance is highly recommended.

Key Vendors and Customers. In preparation for hurricane season, it is important to update your business contact list, and distribute a hardcopy and electronic version to all key staff members. It is also important that you communicate your plan with your vendors and customers so they know how to get in touch with you following a storm.

4.    Backup Data: One of the most important aspects of the recovery process is to have your data available to restore when the storm has cleared the area. Prior to a hurricane making landfall make a backup copy of your critical data and leave it in a safe place that you can easily get to, such as a waterproof safe, or have it moved to an alternative location.
 
5.    Document Your Office & Contents: Just as you advise your policyholders to prepare for hurricanes by making a visual record of their homes and its contents, insurance companies need to do the same thing. A visual record of your office and its contents using a digital camera or video recorder should be made prior to any major storm making landfall. This will help you to document your claim in the event of damage or a complete loss.

6.    Safe Guard Important Papers: It is vital that businesses safeguard important business papers such as deeds and insurance policies from damage. Important business papers should be placed in a safe, waterproof place or moved to an alternative location where you can easily access them.

7.    Alternative Power Source: Often times following a hurricane power is cut off and in some cases it may be weeks before it is restored. It is critical that victims of a natural disaster be able to locate and receive assistance from their insurance company. An investment in a generator and enough fuel to run it for two weeks is highly recommended. Testing of your emergency equipment to ensure that it is working properly prior to hurricane season is also recommended.

8.    Alternative Location: In 2005, following Hurricane Katrina many Gulf Coast businesses found themselves unable to return to their offices for weeks or months due to mandatory government evacuations or because their offices were destroyed or badly damaged. Your business recovery plan should take this scenario into consideration and an alternative business location, one that your employees are aware of and can access, should be arranged in advance.

9.    Alternative Communication Methods: In the aftermath of Hurricane Katrina one of the biggest problems facing businesses was the lack of communication. Power, Internet service, telephone and many cellular towers were knocked out during the storm. A satellite phone for key staff and portable Internet devices are a good investment anytime but could be critical as you business recovers and you strive to continue to provide your policyholders with services.

10.    Review your Insurance Coverage: Even insurance carriers need to review their coverage on a regular basis. Just like any small business, insurance companies need to obtain business interruption insurance and ensure that they have adequate flood insurance in place.

No one wants to be the victim of a hurricane, a tornado or other natural disaster. For companies located near a vulnerable coastline, hurricanes are a reality that cannot be ignored. By planning and making preparations in advance you give your business the best possible chance of making a full recovery and continuing to thrive in the aftermath.

Often times we don't give much thought to what it actually costs to receive and process a payment. Most executives simply chalk it up to the cost of doing business. However, processing a check is expensive and is one area where companies can reduce expenses.

True Net Cost of Receiving & Processing a Payment

What is the true net cost of receiving and processing a recovery check? How many staff members touch the payment before it's deposited into your bank account? In a typical office, a member of the staff has to receive the mail, open the envelope and forward it to the accounting department. Once the payment hits the accounting department, data-entry must be performed in order to reconcile it against outstanding claims, and then a deposit has to be made and delivered to the financial institution.

Industry studies show that on average, it costs companies $13-$30 to process each check.

More Efficient Payment Processing

How much time are your employees spending on payment processing and what does that cost you in salary and benefits? Considering the number of payments you receive each month and the average amount per payment, is the true net cost of processing your payments effective?

SubroPro, developed by Recclaim Software Solutions, delivers premier tools that allow you to cut payment processing costs, expedite processing, improve employee productivity, and create a more profitable and efficient subrogation department.

Using imaging hardware, SubroPro enables staff to scan thousands of checks at a time. They then only have to enter the claim number in order for the system to match the settlement, apply the payment, and create an electronic batch that will then be processed through the banking system in a more cost-efficient and time-effective manner.

In addition, SubroPro increases employee productivity by allowing them to concentrate on claims that need attention rather than processing payments. SubroPro's robust reporting tool also allows you to measure a wide range of performance metrics including employee productivity throughout the payment process.

One of the benefits of working with, and being a part of, an industry that deals with risk is that we have the opportunity to hear how many different companies deal with risk in their own way.  After having talked with almost a hundred carriers, Acclaim Resource Partners started to see trends relating to threats that companies face.  However, to delve deeper into this issue and to be able to put statistical information behind these trends, we commissioned a study to look at the commonalities of the issues that companies in the insurance industry face with the intention of being able to identify strategies that will increase revenue and value for their policyholders.  This study is not just related to the subrogation process, but the insurance industry as a whole.

One of the interesting facts to come out of this study is the number of carriers that failed over a 30 year time period and the rate at which they continue to fail today.  Technology, regulation, and how carriers approach their policyholders are all factors that impact an insurance company's bottom line.

When all is said and done, certain common strategies emerged that allowed successful companies to thrive.  There is not just one "silver bullet," but rather a number of areas that can bring significant value back to the bottom line.  Ultimately, it's about how well an insurance company provides exceptional service to their policyholders. With exceptional service, policyholders will find no need to consider going anywhere else for their insurance needs.

Historically, the recovery and remittance process has been a very manual and time-consuming procedure for both vendor and client to understand where each stand in the subrogation management work-flow. Traditionally, checks are received by a vendor, opened, applied, and forwarded on a monthly basis to the client with the fee retained. Occasional NSFs would occur,dealt with separately, and could take weeks to return to the vendor indicating a lack of sufficient funds in the account. The recovery process was plagued with constant vendor/carrier confirmation of correct check amounts and the ability to accept check amounts.

This manual remittance process had many steps, mostly dealing with determining the claim number and confirming the proper log notes.

Once a remittance was made for the client, this work-flow could start all over again for the client to review/confirm theirs or the vendor's notes to determine if the correct amount was recovered and properly remitted.

Often the vendor's notes lack the correct amount to be recovered and remitted, causing frustration in the vendor/client relationship. Acclaim Resource Partners appreciates all of our client's concerns and we realize the need to be confident in knowing where our client's recoveries are at in the recovery life-cycle at all times.

Acclaim takes seriously the issue of transparent data share when dealing with a client's recoveries. Therefore, as part of the remittance process, Acclaim recently enhanced the checks and balances process to provide our clients with more effective details. Acclaim's improved audit trail is a direct result of the industry concerns dealing with a number of subrogation recovery companies who are no longer in business.

With the help of Recclaim Software Solutions, Acclaim added an electronically captured view of each recovery check received onto the settlement forms.

This all-inclusive report provides our clients a simplified audit trail of each check Acclaim receives along with the remittance data. The ability for Acclaim to present inclusive client remittance information is due to our subrogation application, SubroPro. This industry leading subrogation suite allows for the entire recovery life-cycle to be electronically captured, reviewed, and exported for transparent data share with our clients.

Through this industry advantage to capture, process, and send electronic deposits to the bank, Acclaim utilizes a new electronic work-flow to considerably change the client/vendor interaction through the remittance landscape.What is meant by this? Now carriers can have their money deposited directly to their accounts by their vendors through utilizing this new subrogation suite, SubroPro.

Imagine, instead of hundreds of checks requiring issuance by the vendor and deposited by the carrier, this recovery life-cycle can now be effectively automated in the future.

Today’s competitive economic environment has led companies to reduce expenses at every turn while looking for additional revenue opportunities in our soft market.  This is a smart move, but brings consequences when it comes to skill-building if one of those areas being cut is the development of our people.  I always think the one thing forgotten in this conversation is the return on investment that is realized when an investment is made in training.  Let’s consider this…. we wouldn’t build a building without a strong foundation –why do we believe our people deserve less?  If you gave someone $5.00 and they could turn it into $100.00, would you do it?   If your people learn something new that results in the same level of return, would you do it? 

Now I’m not trumping the idea of spending tens of thousands of dollars to get this done.  What I am proposing though is that we get creative in how we bring knowledge to our people.  There are many on-line training courses (NASP Webinars as an example – www.subrogation.org), blogs, certification opportunities (CPCU, AIC, Certified Subrogation Recovery Professional designations), memberships to industry organizations along with the ability to access the knowledge our business partners bring to the conversation. 

I’m interested in other ways that people are bringing an investment in human capital to their organizations.