Arbitration Forums Inc., a not-for-profit firm that arbitrates intercompany insurance disputes, said it resolved a record 497,692 cases last year, compared with 477,000 in 2007.
W. Russ Smith, Arbitration Forums president and chief executive officer, said the firm, which describes itself as the nation's largest provider of interinsurance dispute resolution services, handled disputes valued at more than $2.4 billion in 2008.
In the year ahead, he said economic factors could possibly flatten or slow the company's volume.
AF counts some 4,300 carrier and self-insured members nationwide and Mr. Smith said the firm is saving the property-casualty insurance industry more than $700 million annually by resolving disputes without litigation costs.
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, Mr. Smith explained. Over 80 percent of intercompany arbitration disputes involve auto collisions.
Mr. Smith added that, "To the extent the economy causes fewer cars to be on the road and/or fewer miles driven, the shedding of insurance coverages due to belt tightening by consumers and the lack of new cars being sold and financed (mandating physical damage by the lender), I expect our volumes to remain constant or slightly decline."
"The growing interest in arbitration programs could be attributed to heightened company focus on saving expense dollars and the ease of use of electronic filing through the Internet and e-mail to further speed the arbitration process," he said.
AF recently announced that it would no longer charge a fee to notify parties to a dispute that an arbitration action has been submitted by members who use its online filing service.
Eliminating the fee for the notification service, said Mr. Smith, will save the industry $1 million annually and further speed the arbitration process and reduce paper consumption by encouraging even more online filing.
He pointed out that over 90 percent of the filings in 2008 were made electronically–almost double the percentage of just a few years earlier.
AF provides members with the E-Subro Hub, 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.
Mr. Smith said the E-Subro Hub significantly speeds up the subrogation process and reduces costs for insurers, self-insureds, third-party administrators and claims service organizations.
"AF will continue to embrace new technology, utilize a single platform to work toward a paperless operating environment and seek nontraditional avenues to provide best-in-class service to its members," he promised.
AF was founded in 1943.
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