By Tim Christ, Subrogation Solutions Expert
In 2023, Arbitration Forums reported that a staggering 1.1 million inbound subrogation files went to arbitration, which is 47% of the total 2.4 million demands filed within E-Subro Hub®. With an estimated average of 80 minutes spent per file, this amounts to a colossal 1.46 million hours of staff time spent on these demands, which has only continued to increase each year.
Handling inbound subrogation demands can be a daunting, time-consuming task. Demand packages, which can range anywhere from 25 to 200 pages in length, require meticulous manual review and validation, making them prone to inconsistencies. The results? Overpayments and the looming threat of arbitration.
The subrogation landscape needs a change, and CCC is here to help.
In our latest webinar, guest speaker Rick Trevino, Assistant Vice President at Loya Insurance Group, explained that the "inbound subrogation process has been manual and has not changed very much in [my] 26 years of tenure." Trevino discussed the importance of technology and how CCC® Inbound Subrogation leverages automation to improve efficiency with inbound subrogation processes.
He outlined several key areas of inbound subrogation that can benefit from automation including:
Let's dive deeper into each of these three reasons to automate your inbound subrogation process.
Audit rules are the fundamental guidelines for accurately reviewing inbound demands. Implementing consistent audit rules can help guardrail assessments and help carriers improve accuracy, ensuring that the requested items in demand packages fall within their predefined threshold.
The historically manual nature of assessing subrogation demand packages – including line items such as parts, labor, and storage fees – has been a significant challenge for many carriers, resulting in inconsistencies. Some carriers employ internal teams, while others utilize Third-Party Administrators (TPAs) to assess demands and detect if there are any line-items that require a counter response. With a manual process, the quality of reviewing demands can vary from adjuster to adjuster, based on their experience and subjectivity when applying rules. Identifying if line items fall within audit rules, and having confidence that all required documentation has been included in the demand, can impact the overall outcome of the counter response.
These challenges are shared across insurance carriers, but with today’s technology, they don't have to be. CCC Inbound Subrogation provides you with the ability to leverage carrier-specific audit rules that can be configured to meet your specific needs. We also equip you with a historical parts database to determine whether alternative options were available to the exact day.
"The ability to adjust our solutions to our business rules and constantly have that availability to change and adjust rules as we see fit" is one of the most important things his team at Loya Insurance Group is doing to improve their inbound subrogation accuracy today, Trevino said. And it's a tactic he believes is one of the most important things any carrier can do to improve their own inbound subrogation processes. "Containment is huge,” he continued. "For us, containment in the first month of implementing CCC Inbound Subrogation is at 26.5%. With a prior partner, if I exceeded that 20%, it was an exception. To see it within the first month at 26.5% is outstanding."
Like most carriers, you probably face a high volume of inbound demands from various sources, including direct emails to the first party APD adjuster. These demands, which cover things like liability, storage fees, labor fees, rental fees, and parts selection, require expertise to assess and respond to, and often need additional intervention and rework. The absence of a dedicated team for inbound subrogation and policyholder claim prioritization puts additional strain on your first-party adjusters. The adjusters are often spread so thin that it’s possible they might approve an inbound demand as presented without fulsome review, resulting in missed opportunities.
The level at which you can assess inbound demands often comes down to your adjusters' bandwidth. Streamlining your assessment processes helps optimize capacity, enabling overwhelmed adjusters to tackle inbound demand volume without sacrificing quality. CCC Inbound Subrogation lets you automatically audit demands to the line-item level, so you can quickly settle ones that fall within your carrier rules, freeing up precious time and resources to evaluate complex demands and reallocating time spent on manual tasks to high-priority claims activities.
"The automation of reviewing inbound demands brings back efficiency, provides the information needed to settle that subrogation demand and pay what is owed and in doing so, allow your staff to increase their productivity," said Trevino.
Auto claim adjusters carry many loads, and inbound subrogation is a heavy one. The manual line-item review of demand packages is a meticulous task that requires both time and focus to find savings opportunities for the business. This process is so labor-intensive that the cycle time from assessment to resolution can take weeks, or sometimes even months, to complete, which can have negative consequences on subrogation outcomes. Some adverse carriers, for example, enforce a time limit after which they automatically take the demand to arbitration, resulting in additional fees, time, and resources.
Automating inbound demand audits can quickly reduce cycle time challenges and give your team more time to focus on complex cases with opportunities for savings. CCC Inbound Subrogation can intake and assess inbound demands in minutes, reducing cycle time and manual intervention.
"With CCC's solution, we blew our SLAs out of the water," said Trevino. "Compared to SLAs I had with previous partners, it's a night and day difference.” Within the first month of using CCC's inbound subrogation solution, Loya Insurance Group submitted 1,070 demands through the platform and their cycle time (from review to response) decreased to 0.22 days. Loya's same-day closures are currently at 42.2%, Trevino added.
CCC® Inbound Subrogation is designed to assess inbound demands in minutes and help carriers pay what they owe. Utilizing AI extraction, classification, and identification of claims information, our solution increases speed and helps automate the historically manual processes involved in assessing and resolving inbound demands. From reviewing the degree of liability, to leveraging carriers’ own configurable audit rules and CCC’s extensive parts history, carriers can now increase accuracy of reviews, optimize capacity by decreasing manual touch-points, and reduce cycle times from assessment to resolution.
As Trevino said in our webinar: "The proof is in the pudding – the front end is absolutely outstanding results for me and the Loya Insurance Group today."
