When Arbitration Forums told us that its new web-based subrogation system could save insurers up to $500 million in claim costs, we decided a little chat was in order. Claims' Eric Gilkey went straight to the top to find out more.
Tell our readers a little bit about the web-based subrogation system. How does it work?
The E-Subro Hub is a web-based electronic communication and document management tool that provides our membership and the industry as a whole with a more efficient method to process their subrogation demands and responses electronically.
To start the process, a user simply begins by logging onto our web site, navigating to the E-Subro Hub issue demand tab. Here the user enters some basic claim information on the tab formatted system that easily walks him through the process. The final step is attaching supporting documents electronically by using one of three simple methods: direct file upload (like attaching a file to an e-mail), fax, or AF Client, a patented print/scanner application. AF Client allows the user to send their documents in any proprietary format. The unique feature with AF Client is the upload process occurs behind the scene so the user is allowed to continue working during the upload process. The AF Client process converts all documents into PDF format.
Little-to-no training is required as the E-Subro Hub system also has predetermined action icons to simplify the resolution tasks so both companies can easily process their subrogation activities. Members can use the system to communicate directly with each other or to schedule a time for a phone conversation. Once settlement is reached in the system, it provides the users with the ability to upload all information and documents electronically to their claim system. If settlement is not reached, filing arbitration is only one click away, where the case will be heard at our soon-to-be-paperless hearings. All information and documents are encrypted using the same encryption technology as the banking systems.
How does an electronic approach speed up the subrogation process?
The current workflow process for a subrogation demand starts with several phone calls to identify the adverse company adjuster. Once the proper party has been identified, the demand and documents are either mailed or faxed for processing. At this point, the demand adjuster usually waits for the adverse party to get the materials and respond to his demand (assuming it gets to the correct person).
The time for processing this task varies among companies from a couple of weeks to a couple months depending on adverse carriers' subrogation workflow. These methods are very time consuming and have a large impact on the adjuster's productivity. Also, it does not offer any guarantee the information will arrive at the intended location, so the process could start all over again.
E-Subro Hub eliminates the time and effort spent on trying to identify the adverse party by having pre-established routing rules in place. This feature eliminates the time spent on acquiring the adjuster-level contact information. The user only needs to know the adverse company name. Also, all documents are sent and can be accessed electronically on the web site, which eliminates the possibility of losing materials. There is no need to resend any documents ever again. This is a common problem with the mailing and faxing solutions.
The E-Subro Hub system tracks all activities, so every task performed can be measured and reported on to improve business productivity. The average response time using the E-Subro Hub system is 4.2 days. This significantly reduces the cycle time compared to using the traditional mail and fax methods. Also, with most companies moving to a paperless environment, the system saves the time and expense of converting paper into images.
You said that the system could save P&C insurers $460 million each year. How did you arrive at that figure?
Every year, there are approximately 3.5-to-4 million auto material damage subrogation demands in the industry. The savings is based on an industry cost benefit analysis that utilized data collected from our membership on the subrogation process and key cost factors. Some key cost factors are: adjuster time to locate and contact the correct adverse party adjuster, process time to send a paper demand, shipping materials and postage, labor time spent on requests for additional/same information, and the cost of processing an incoming paper demand.
The primary purpose of E-Subro Hub is to eliminate the time spent on the clerical processing of a subrogation claim. We have reviewed many workflows with our membership with our focus on helping them eliminate/automate the clerical tasks the adjuster goes through when processing a subrogation claim. There is a large amount of friction in the subrogation process; the E-Subro Hub service reduces this friction between the companies.
Is there a cost for users?
No. As a member-driven organization, Arbitration Forums has invested in this solution for the benefit of the industry. Our mission is to effectively and efficiently serve our members' resolution and recovery needs.
