Company: The Innovation Group

The Innovation Group introduced TiG LTE 2.1 this summer. It is an enhanced version of its specialized solution that works with more than 20 types of long-tail-exposure claims. The new version features upgraded support, which includes added capacity to apportion and track payments and reserves, for carriers handling mass tort claims and dealing with multiple litigants and multiple policy claims structures. TiG LTE 2.1 gives carriers control over their financial exposure, thus ensuring accurate reserves and aiding Sarbanes-Oxley reporting.

The prevalence of long-tail claims has resulted in lowered ratings, unnecessary overpayment on cost-sharing agreements, stalled mergers, and impacts on combined ratios. They also have caused carriers to increase reserves and hire expensive actuarial auditing services due to not having an accurate grasp on exposures or liabilities.

TiG LTE 2.1 features include:

• Multi-Claimant Claim Structurefor claims involving multiple litigants and policies.
• Apportionment of Financialsrules-driven, accurate accounting of reserves, payments, and recoveries.
• Streamlined Claim Setupallows attorneys to focus on adjudicating claims, not on data entry.
• Streamlined Invoice Processingcen- trally processes invoices rather than claim by claim.
• Auto Limit Trackingnotifies carriers regarding liability limits to reduce leakage, speed reinsurance recovery, and avoid punitive damages.

At NWI, systems requirements were many, according to David M. Haggerty, vice president finance/administration. They included the ability to: streamline the indexing of massive amounts of new claims/claimants; allocate automatically claims over multiple policies, over multiple years, both at an event and litigant level and to change those allocation percentages as future events unfold; track policy aggregates and prevent payments that exceeded those aggregates automatically, both at the occurrence level and at the policy level; settle with some but not necessarily all litigants in a given year; manage claims at the account level and track information at the claimant level while maintaining event-level knowledge; issue one check in settlement of multiple invoices from the same firm covering multiple claims; and enter gross amounts and have the system automatically calculate and apply applicable cost-sharing agreements.

Streamlining the indexing of new claims was achieved through the ability to create custom queries based on the class of loss, says Haggerty. The asbestos query was different than the environmental query; that was different from the LTE query, etc. In addition, the system has the ability to set automatically initial reserves for loss and expense amounts. Later, as the facts unfold, the adjuster then can adjust the reserves to reflect the specifics of each claim.

Claims and claimants are able to allocate across years based upon rules established by the adjuster, explains Haggerty. These rules are flexible and can be changed or modified as needed, both retrospectively or prospectively, he says. Both occurrence and policy aggregates are tracked by the system, and payments cannot be made without an override by an authorized person if they cause the limits to be exceeded. The ability both to allocate claims properly over multiple policy years and to check against aggregate limits is particularly important with policies that are retro premium policies (losses trigger future premium payments by insured). The ability to demonstrate which years have been exhausted is extremely important not only to the insured but also to other insurers that have exposure to the same loss. The ability to make bulk payments saves check stock, handling costs, and postage.

After the direct-claim system initially was installed, NWI began a process review of the asbestos claims unit to determine how the new system fit into the daily work effort. It also assessed whether there were processes that needed to be adjusted so they better matched the new claim system or whether the new claim system needed further enhancements to achieve a higher level of efficiency, according to Haggerty. It was no surprise to learn both situations were found, he says. As a result, certain processes were changed to align better with how the new claim system worked and new enhancements were outlined as future developmental needs.