July 25 - Post Magazine
July 25 - Post Magazine
With no industry standard or regulatory framework this is understandably a source of debate and can give rise to disputes. In an attempt to control their ‘at fault’ exposure to cost, insurers enter into individual agreements with each other which can include standard subrogation [where all claims handling costs are absorbed internally and only repair costs are passed on to the third party insurer]; dual pricing [where different pricing schedules are set for non-fault and fault claims] and bi-lateral arrangements [where both insurers communicate directly and maintain a level of control over the claim and their customers]. Unsurprisingly, the management of these arrangements can be onerous on insurer resources and give rise to mounting business processing costs.
And what of the consumer – is the industry able to provide the highest quality service to motorists in the absence of any standardised procedures?
Recognising the challenges of the current environment, CRIF and the Association of British Insurers [ABI] held workshops for insurers in April and July to discuss and consider the future of motor subrogation. There is agreement that a collaborative approach to subrogation will improve business efficiency, reduce costs and speed up reconciliation for the consumer. Insurers recognise the benefits technology can bring to a collaborative approach. This is where web based applications excel, delivering a cost effective way for insurers to access a common technology platform to manage subrogated claims. Within the platform, they can enter a claim record and automatically identify the third party insurer involved. Electronic workflow tools can then be used by insurers to negotiate liability, exchange supporting documents, register cost items related to the claim, automatically calculate the sum to be recovered and submit a payment request.
However, there is concern, particularly in relation to interactions with third parties who do not want to follow a collaborative approach, that insurers will need to commit to new investments in order to move forward and, at the same time, continue managing the myriad of current arrangements. But can a transparent, paperless system with standardised procedures for subrogation really meet the varied needs of insurers and integrate with their established business processes? The business case for adopting technology can only be made if that technology is equipped to evolve with the changing subrogation landscape, and if the technological support can be customised with specific rules for insurers with bi-lateral agreements or special communication protocols if needed to give insurers the flexibility to negotiate each claim on a case by case basis.
Whilst the future of motor subrogation remains uncertain, the appetite amongst insurers to adopt a collaborative approach, talk a common language, use a structured framework and gain a consensus on sharing the claim is apparent and refreshing.
by Sara Costantini, Director at CRIF Decision Solutions Ltd
