An arbitration service organization is claiming that arbitration can save the property/casualty insurance industry more than $700 million in litigation costs annually through programs that resolve insurance claims disputes outside of the courtroom

The CEO of Arbitration Forums, Inc. (AF), W. Russ Smith, told the National Association of Subrogation Professionals at its annual conference last week that the Tampa-based AF resolves more than 475,000 inter-insurance company disputes annually, with a claim value of over $2.3 billion.

Disputes leading to arbitration typically arise when insurance or self-insured companies believe their insureds are not at fault or due to disagreements over the percentage of liability or the amount of damages, Smith explained. Over 80 percent of inter-company arbitration disputes involve auto collisions.

Smith urged more claims and subrogation professionals to become arbitrators, noting that a minimum of three years of claims experience is required before one is qualified to take the certification exam administered by AF.

Calling volunteer arbitrators “the backbone of the entire inter-company arbitration process,” Smith said the organization was committed to enhancing the quality of arbitration decisions.

He further observed that arbitrators must abide by high standards of conduct to guarantee integrity and fairness, are qualified to hear appropriate cases and derive their authority from the respective arbitration agreement. “Objectivity and neutrality are the foundations of a credible arbitration system,” said Smith.

Looking ahead, Smith said “AF will continue to embrace new technology, utilize a single platform to work toward a paperless operating environment, and seek non-traditional avenues to provide best- in- class service to its members.”

One of the new applications of cutting edge technology is the E-Subro Hub, which provides members with a single web-based platform to interactively issue and respond to subrogation demands, share and manage documents electronically, as well as file and respond to arbitration cases.

As an electronic clearinghouse, the E-Subro Hub speeds up the subrogation process and reduce costs to insurers, self-insureds, Third Party Administrators and claims service organizations, Smith said.

Special Reports /

Arbitration Could Save Insurers Millions

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