TAMPA, FLA. — More than 520,000 inter-company claims disputes, valu-ing nearly $2.5 billion, were resolved in 2009, a new record according to W. Russ Smith, president and chief executive officer of Arbitration Forum (AF), which has some 4,300 carrier and self-insured members nationwide.
Smith estimated that AF saved the property-casualty insurance industry more than $700 million in litigation costs annually through programs that effectively resolve insurance claims disputes. In 2008, AF resolved some 500,000 inter-company claims disputes valued at more than $2.4 billion.
Disputes leading to arbitration usually 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 85% of inter-company arbitration disputes involve auto collisions.
He pointed out that over 92% of the arbitration filings in 2009 were made electronically – almost double the percentage of just a few years earlier.
“AF continues to invest in ways the industry can effectively and efficiently resolve subrogation claims,” said Smith. “As a not-for-profit, we are committed to serving the industry’s needs, and an electronic, end-to-end subrogation and resolution claim process is another way we can do so.” Smith noted that AF continues to expand E-Subro Hub, an electronic subrogation claims system offered to participants at no cost that is designed to dramatically increase productivity and efficiency of the subrogation process.
He said AF expects that phase one of
the E-Subro Hub system rollout will
save property/casualty insurance com-
panies and self-insureds hundreds of
millions of dollars annually by enabling
users to electronically send and receive
subrogation claims, attach supporting
documents, manage subrogation claims
and electronically file intercompany ar-
bitration where necessary. The program
has been extensively tested in Massa-
chusetts and the Mid-Atlantic states.
The average time from filing a subrogation claim to closing was 16. 2 days using E-Subro Hub in the pilot test states, reducing turnaround times by more than 50 percent in many instances.
The pilot tests also found improvements in customer service, as subrogation demands were accepted in just 10. 4 days on average, allowing insurers to return deductibles to their policyholders faster.
Smith added that AF announced changes to its fee structure and clarifications to the Forum Rules that – in conjunction with 2009’s notification service fee elimination-will save the industry $4 million annually and further speed the arbitration process.
■
AF is the nation’s largest arbitration and subrogation services provider, founded in 1943.
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