While many segments of the insurance industry are strugglingmightily with the challenges of modernizing their technology, atleast one area of the business has made significant strides instreamlining carrier-to-carrier communication.

Sean Rickert, manager of e-solutions for Arbitration Forums Inc.in Tampa, Fla., says that subrogation has received an “electronicsmakeover”—making this important process more efficient and reducingcosts.

The nonprofit Arbitration Forum, which provides arbitration andsubrogation services to help resolve insurer and self-insureddisputes, has developed E-Subro Hub.

The tool is meant to facilitate the handling of issues relatedto subrogation—the practice of one insurer placing a demand onanother insurer for payment of a claim where liability isdetermined to be the fault of the other company's policyholder.

Prior to E-Subro Hub, the common—and costly—practice wascarriers copying, mailing or faxing materials to each other andthen playing phone tag to follow up on the claims, saysRickert.

E-Subro Hub eliminates that paper exchange, allowing allcommunication to occur digitally. “What used to be printed out isnow transmitted electronically,” says Rickert.

While not naming the carriers, he says that eight of the 10largest carriers in the auto-insurance field have committed toE-Subro Hub, which is expected to handle more than 500,000transactions this year.

In time savings alone, the system has reduced the average cyclefor resolution from 40-plus days to 21 days, he says.

Currently, the tool is limited to auto programs “because thatwas the simplest and easiest” to implement, says Rickert. Planscall for expanding the system to homeowners insurance “in the nearfuture.”

The system is available to all carriers at no cost to them (thecost is born by the association as part of its operations) and willbe available in all 50 states by July of this year.

“The industry faced a battle over developing standards, and ithas addressed that challenge here,” says Rickert. “The industry hadto face the walls that stood between [electronic,company-to-company communication], and it has completely passedthat test.”