While many segments of the insurance industry are struggling mightily with the challenges of modernizing their technology, at least one area of the business has made significant strides in streamlining carrier-to-carrier communication.
Sean Rickert, manager of e-solutions for Arbitration Forums Inc. in Tampa, Fla., says that subrogation has received an “electronics makeover”—making this important process more efficient and reducing costs.
The nonprofit Arbitration Forum, which provides arbitration and subrogation services to help resolve insurer and self-insured disputes, has developed E-Subro Hub.
The tool is meant to facilitate the handling of issues related to subrogation—the practice of one insurer placing a demand on another insurer for payment of a claim where liability is determined to be the fault of the other company’s policyholder.
Prior to E-Subro Hub, the common—and costly—practice was carriers copying, mailing or faxing materials to each other and then playing phone tag to follow up on the claims, says Rickert.
E-Subro Hub eliminates that paper exchange, allowing all communication to occur digitally. “What used to be printed out is now transmitted electronically,” says Rickert.
While not naming the carriers, he says that eight of the 10 largest carriers in the auto-insurance field have committed to E-Subro Hub, which is expected to handle more than 500,000 transactions this year.
In time savings alone, the system has reduced the average cycle for resolution from 40-plus days to 21 days, he says.
Currently, the tool is limited to auto programs “because that was the simplest and easiest” to implement, says Rickert. Plans call for expanding the system to homeowners insurance “in the near future.”
The system is available to all carriers at no cost to them (the cost is born by the association as part of its operations) and will be available in all 50 states by July of this year.
“The industry faced a battle over developing standards, and it has addressed that challenge here,” says Rickert. “The industry had to face the walls that stood between [electronic, company-to-company communication], and it has completely passed that test.”