CLIENT SUBROGATION PORTAL

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 workflow.  Traditionally, checks are received by a vendor, opened, applied, and forwarded on monthly to the client with the fee retained. 

We are three short weeks into the new year and the insurance industry is facing the same issues we were looking at in the last half of 2008 - a soft market and lower or stagnant investment income. Our clients share with us the freezing of budgets and how employees are not being replaced as they attrition out. Doesn't sound very promising, but I refuse to believe we only need to look at the bleak side of the situation when it comes to driving revenue for an organization. Although the soft market and premiums are not as good as we would like to see, I'd like to argue the third leg of the three legged stool is not being maximized as it should - the use of an effective subrogation strategy to enhance the bottom line.

I believe we would agree, in handling your personal checkbook, that if someone owed you a large sum of money that you would be aggressive in pursuing the money. Why should it be different for a company to treat those dollars, paid on behalf of their policyholders, to be handled differently? Claim payments obviously have a direct impact on the profitability of the company and the off-setting recovery of the dollars has an equal importance on improving profitability. Most organizations have some form of subrogation process, but that doesn't mean the process is being maximized, especially if the subrogation is being handled by the front-line claims staff. This is in no way to be derogatory to the those hard working individuals taking extraordinary care of settling claims for their policyholders, but I've been there - BI claims, total losses, and the myriad of other pressing claims keeps the adjuster from concentrating on the "closed file in the drawer" which needs a recovery. I'm not saying the file won't get handled, but time is money. Therefore, unless a staff person's full time job is to handle (and become an expert in) subrogation claims, recoveries won't be maximized. I also challenge each CEO, CFO, VP of Claims, or others familiar with the calculation of a combined loss ratio to determine how many policies would have to be sold in order to realize an increase of 10% (substitute any number here). Whether or not a company is handling their subrogation internally in a centralized manner or if they are outsourcing the subrogation function, subrogation recoveries should be considered a prime source of revenue. People aren't going to quit having claims. Not much that can be done about that. However, you can still maintain profitability through your effective subrogation strategy.

Feel free to contact me if you would like to receive a list of key measurement questions to determine the effectiveness of your subrogation process - kevin.may@acclaimresource.com.

Although I'm not much of an "Olympics guy", I couldn't help but watch the swimming events, especially the accomplishments of Michael Phelps and Dara Torres. I was in awe of their commitment to accomplishing their goals even though both are on opposite ends of their careers (although I wouldn't count Torres out too soon). Both knew that in order to reach their goal, they would need to not only have a plan, but be committed to implementing it and staying with it for the long-run. It obviously wasn't easy, but they stuck with it and became the best they could be. If you think they accomplished this by themselves, think again. They had coaches, nutritionists, and a number of other individuals to keep them limber and motivate them towards their goal. It is the classic example of personal accountability with a team effort. I know each of their team members were also striving to be the best they could be and to reach their goals. Keep in mind, if it wasn't for one of Phelps' team-mates swimming a phenomenal leg, Phelps would have had 7 golds and 1 silver! Still not bad, but due to this team-mate's efforts, Phelps now holds a record 8 gold medals. Same applies for Torres (who was swimming in her first Olympics the year before Phelps was born). She has 12 medals over her career beginning with the 1984 Olympics!

There are a number of lessons we can take from Phelps and Torres:

1. The drive to excel comes from within:

- We will not accomplish our goals unless we are passionate about reaching the end result.

2. Planning is essential :

- We need to know how we will get from Point A to Point B.

3. Hard work is part of the process:

- We can't rely on someone else to accomplish our own goals.

4. Personal accountability is essential:

- Excuses don't cut it.

5. Teamwork is imperative:

- Our team is there to encourage us and lift us up when we struggle. They are there to keep us pushing towards the goal.

6. Celebrate the Successes:

- Enjoy the fruits of your labor. Celebrate when you reach the mark and then go set the next mark higher!

We each have a choice when we put our feet on the floor in morning as to how our day is going to go. This doesn't mean we will enjoy each issue we face, but it does mean we have a choice as to how we deal with them. Live your day passionately and celebrate YOUR "Olympic successes"!

I can't help but look back over the last two months and wonder "where has this year gone already?". If any of you are like me, I'm tired of winter and am looking forward to some warm weather. However, as much as I'm planning on enjoying the warmth, I know there isn't a lot (ie absolutely nothing) I can control as it relates to controlling the weather. However, that is different in planning for a new year. We set our subro recovery goals (both internally and for our clients) at the beginning of the year giving us our destination. Granted, there will be roadblocks, potholes, and the unexpected as we travel this road, but it's all about setting the course and preparing for those "bumps in the road". It's so important for all of us to be able to see the goal and then be able to plan the route to accomplish them. For me, it is a daily evaluation of what has been accomplished and what I need to do today to keep moving forward. Subrogation is not only recovery focused, but as equally important focused on delivering on the promise to take care of our/your clients in the event of a loss. I believe too many times we are focused only on the bottom dollar (very important!) and forget about the person waiting for the deductible. My challenge to all of you is to plan your day so you take the steps necessary to deliver on "the promise" and to maximize recoveries. Might be as simple as staying up on your "diaries", returning calls, or getting those arbs written. Whatever it is, keep moving forward and don't forget those we serve....

Subrogation: Live it! Breathe it! Share it!

All --

It is always a great time to reconnect with old friends and associates at the NASP conference. As a board member, I enjoy meeting with the first time attendees and seeing how excited they are to have the opportunity to network with other subro professionals along with attending the educational sessions.

In our role as a partner to the insurance industry, our team enjoyed the opportunity to share how both the Acclaim and Recclaim services can impact their operations. It's always a good opportunity for the insurance communtiy to see the different types of services available to enhance their operations. It's also good to see the breadth of services available dedicated to the subro field. Who would have thought 9 years ago when there were only 440 attending the first show that we would be where we are today? Can't wait to see everyone again in Hollywood next year.

I'm going to put my NASP hat on for today's commentary... Our National Conference is coming up in just three weeks and promises to once again be the premier subrogation training opportunity of the year! I encourage everyone, if not yet registered, to do so now. Not only will you have over 60 subrogation classes to chose from, but you will be able to network and meet your peers (probably some that you have spoken with over the years and have never met). We also have the opportunity to "give back" to the New Orleans community with a volunteer effort on Sunday morning. Hopefully we will see you there. Stop by our booth (#608-610) to say hi. See you in New Orleans.

I like numbers. Anybody that knows me will confirm that statement. As I look at the effect subrogation has for a carrier, I like to look at what would have to occur in other areas of the company to have an increase of 10% to the bottom line. How many policies would have to be sold? How many positions would you have to reduce? What about your investments - what would you have to do in the market to obtain this increase? Increasing subrogation recoveries by 10% (or more) can be done. This also begs the question as to how companies set subrogation goals for their areas? I'd be interested in hearing other's thoughts on this.

Have you ever wondered how other companies define success in their subrogation operations? Is it strictly dollars based? What about the effect subrogation has the promise they made to take care of their policyholder in the event they experienced a loss? Isn't the recovery of their deductible in the subrogation process a "value add"? Think about it - if two neighbors have a loss and one receives their deductible back 3 months sooner than the other, who is going to be touting their carrier's performance?

I've been reading many articles lately on how the insurance industry is beginning to adapt to new technologies which they have been not be willing to do so in the not-so-recent past. Although I'm not a "techy", it appears to be an exciting time in the industry to adapt these technologies for process improvement and added value to the bottom line. It looks like there are a few leading companies out there on the claims, billing, and underwriting side. I'd be curious to hear from others what new technologies they have adapted to their operation and if it has been a good move.

In the course of meeting with a large number of people over the years (both as a carrier representative and outsource partner), I have found it interesting the range of workloads subrogation professionals may have at any period in time. One of the keys to maximizing recoveries is to touch all subro files on a consistent basis. Granted, this will vary on the type of file one may be working. However, in a situation where the professional has so many files limiting their ability to touch files each month (preferably more than once a month), those files are not going to be able to be recovered as quickly as a person with a more manageable workload. So you may ask "who cares if it might take a little longer to get the money into the coffers?". Well, what about your board who could easily calculate the interest you would be losing by not having the dollars recovered and in the bank? How about the policyholder who is looking for their deductible and wondering why it is taking so long to recover it for them? Ever wonder how your partner" on the agency side of the house reacts when their loss ratios are affected and they can't reach the goal as the recoveries haven't yet been made? I'd be interested in hearing from everyone on the target number they shoot for when looking at file counts. Never forget the importance of a timely subro recovery!

Kevin G. May, CPCU, CSRP

I read an article this morning that appeared in the Houston
Chronicle (http://www.chron.com/disp/story.mpl/headline/biz/5155844.html)
supporting subrogation. Two things come
to mind as I read the article and the associated responses. First, it was great
to see someone in the media understand the importance of subrogation and how it
plays an important role in the insurance industry. Secondly, some of the responses indicate we
as an industry may need to do a better job of explaining why we subrogate
claims. There still seems to be an
attitude of the "big bad insurance industry" is out to get them. We've come a long way, but obviously there is
still a lot of work to be done.

What does everyone think about the quality of statements they see today and how they relate to the recovery of their subrogation claim? I wonder if we as industry have lost the art of taking a good statement?

Many times we see statement transcriptions that I wish the person taking the statement had just asked the next follow-up question which would have clarified the situation. Instead, it appears the person taking the statement was following a script and was preparing to ask the next question instead of listening to the response to the question they just asked.

I wonder if statement takers realize the impact a statement has on the recovery of the subro claim? Thoughts?