1. A Road Map to Financial and Operational Success
The Seven Dimensions of Subrogation
The Subro Grapevine

2. Course Presenters Rod Crane –Praxis Consulting
Dan Dudenhoeffer – Praxis Consulting
Chris McPadden –Travelers Insurance and NASP Board of Directors
These presentation materials are privileged and confidential to Praxis Consulting, Inc. and intended solely for the use of the training participants. Any dissemination, distribution or copying of these training materials is strictly prohibited.

3. Introduction
Data gathering, in varying degrees of detail, occurs in all industries.
Information overload occurs when there is a lack of skill set or processes to use the data to make decisions.
Data organized and analyzed in a systematic way ensures its value and prevents information overload.
Both operational and financial objectives and metrics are necessary to ensure the best possible results.

4. Has This Ever Happened To You?
You are concerned about the decline in collections since last month.
The Claims VP wants to know why your cycle times lag behind the previous quarter.
The CFO wants to know why your cost of collections has increased in the past three months.

5. What Did You Do?

6. One Possible Solution
Look inward and outward at your Subrogation Operation, the entire organization, and the Industry.
Evaluate performance against Industry Benchmarks and Best Practices.
Use a comprehensive and systematic approach.
Consider the pros and cons of an internal or external team to perform the evaluation.

7. The Seven Dimensions Quality of Initial Investigation Systems Support
Documentation
Claims Handling Velocity
Organization
Recovery Results
Management Controls

8. Quality of Initial Investigation
Assessment Areas:
First notice of loss capture
Liability investigation and evaluation
Damage evaluation and supports

9. Quality of Initial Investigation
Best Practices:
Centralized initial loss unit to preserve claim details or triage claims to the right adjuster
Recorded interviews and scene investigations
Inspect and photograph all involved vehicles
Estimates within industry standards to minimize PD redlining
Invoices to support non-estimate damage payments
Rentals within industry standards to minimize overpayments and third party reductions

10. Systems Support Assessment Areas: Ease of use of system
System work flows
Management information system

11. Systems Support Best Practices: Expert tools usage to assess fault
Imaged documents
Subrogation-specific functionality
Interfaces between separate systems
Availability of systems support for reporting and systems enhancements

12. Documentation Assessment Areas: Complete and accurate
Knowledge transfer
Ease of access

13. Documentation Best Practices:
All pertinent information is documented in the file notes
File notes support liability and damages decisions
File speaks for itself, allowing easy knowledge transfer
Documents are easy to locate
Timely access to archived file documentation

14. Claims Handling Velocity
Assessment Areas:
File tempo
Aged pending status
Production standards

15. Claims Handling Velocity
Best Practices:
Timely first notice of subrogation claims to adverse party
Aggressive follow-up dates, maintained currently
Use of telephone contacts vs. written communications
Management of aged pending claims
Effective statute management program

16. Organization Assessment Areas: Organizational model Staff training
Referral process
Organizational Best practices

17. Organization Best Practices: Centralized vs. decentralized handling
Written best practices (subrogation-specific)
Claim referral guidelines (e.g., collision referrals within 10 days of claim payment)
Guidelines for interactions with claims handlers (e.g., securing additional investigation or supplemental payment information)
Immediate outsource of UM claims

18. Recovery Results Assessment Areas: Recovery to paid loss
Industry benchmarks
Cycle days

19. Recovery Results Best Practices:
Measure internal results against industry benchmarks (apples to apples)
Performance metrics with counterbalances
Individual and team objectives
Measure cost of collections
Measure cycle days (e.g., date referred to date collected)

20. Industry Benchmarking
NASP benchmarking committee
NASP benchmarking studies (e.g., auto, property, health)
Independent benchmarking studies completed by the Ward Group (e.g., NY/NJ PIP study)
Other benchmarking studies completed within the industry

21. Management Controls Assessment Areas: Reports Quality review programs
Performance management
Missed subrogation

22. Management Controls Best Practices:
Subrogation objectives for claim adjusters and managers
Quality review program to ensure adherence to Best Practices at both the claim and subrogation level (including arbitration)
Data availability to measure key performance objectives
Flexible reporting to turn data into useful information
Use an independent missed subrogation file review process

23. Quality of Initial Investigation Claims Handling Velocity
Sample Assessment Rating Scale
Quality of Initial Investigation
Systems Support
Documentation
Claims Handling Velocity
Organization
Recovery Results
Management Controls
First notice
of loss capture
Ease of Use
Complete and Accurate
File Tempo
Organizational Model
Recovery to Paid Loss
Reports
Liability Investigation and Assessment
Work Flows
Knowledge Transfer
Aged Pending Status
Staff
Training
Industry Benchmarks
Quality Review Programs
Damages Evaluation and Support
Management Information System
Ease of
Access
Production Standards
Referral Process
Cycle Days
Performance Management
 Best
Practices
Missed Subrogation
Score out of scope
Below Benchmark
Meets Benchmark
Above Benchmark
Best in Class

24. Summary Be pro-active to identify variances prior to negative trends.
Develop both financial and operational key performance indicators/objectives supported by metrics.
Have a comprehensive and systematic process to evaluate performance against the financial and operational key performance indicators/objectives.

25. Questions?