Arbitrations between insurance companies in claims dispute matters rose almost 10 percent in 2006, according to a nonprofit interinsurance dispute resolution services provider.

Tampa, Fla.-based Arbitration Forums Inc. hit a new record resolving more than $2.2 billion in intercompany claims disputes in 2006, reported D. Kay Smith, the firm's chief executive officer.

At the same time, the number of arbitration filings rose 9.3 percent, totaling more than 480,000 cases, also a new record.

An Arbitration Forums study found that for every dollar a company spent on intercompany arbitration in 2006, the return on investment was $41.67.

One half of arbitration filings in 2006 were made electronically, up from 17,000 in 2004, when Arbitration Forums introduced its first online filing program.

Ms. Smith attributed the growing interest in arbitration programs, in part, to the ease of use of the Internet and e-mail to further speed the arbitration process.

Disputes leading to arbitration typically arise when insurance or self-insured companies believe their policyholders are not at fault or if they disagree as to the percentage of liability or the amount of damages, Ms. Smith explained in a statement. More than 80 percent of intercompany arbitration disputes involve auto collisions, the firm said.

"Insurance companies and the self-insured are saving an increasing number of expense dollars by choosing arbitration over litigation as the means of resolving property and casualty claims, and new technology will generate even more significant savings and efficiencies," Ms. Smith said.

"The heightened company focus on saving expense dollars coupled with the ease of electronic filing and an increased understanding of the benefits of arbitration programs will generate even more growth in the future," Ms. Smith added.

Founded in 1943, AF has a membership of more than 3,900 insurers and self-insureds nationwide.

Special Reports /

Insurance Arbitrations Up Nearly 10% Last Year

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