(Image credit: Dollar Photo Club.)
Insurance claims organizations are among the most astute users of information technology when it comes to fraud: just as insurers’ IT departments are in a constant competition with hackers, claims departments and their special investigations units (SIUs) are applying the latest technologies to stay a step ahead of the fraudsters. And yet when it comes to claims litigation, insurers are typically employing legacy technologies and procedures that are causing significant losses.
Just as technology is providing new ways of detecting fraudulent claims activity, analysis of prior claims litigation can yield valuable insights into present cases. Here are three ways to determine whether your claims litigation teams lacks the technology and tools to optimize case management and improve bottom line results:
1. Your claims litigation department cannot run a report to evaluate how much a particular opposing attorney will settle for based on prior settlement tactics.
Oftentimes, the same attorneys sue your company over and over. These attorneys start each case by saying, “We will not resolve this matter until you pay us this amount.” Each time, you have hired your own attorney. Eventually, you usually resolve the cases for significantly less than your adversaries’ original offers.
If your litigation department cannot use prior data to start each case with a bottom-line benchmark, your claims litigation team has not properly used technology to leverage its supreme data advantage.
2. Your claims litigation department cannot run a report to evaluate which attorney they should assign to achieve the most cost-effective result.
Software can also guide your company to select the right attorney to defend the lawsuit. Attorneys produce value by helping you limit your total exposure. If they settle a case for half of what you could have lost at trial, your attorneys have provided you with quantifiable value. The next part of the equation is determining how much each attorney charges you for that quantifiable value.
If your litigation department cannot use prior data to assign the case to the most efficient attorney for that type of case, your claims litigation department is not taking advantage of software capabilities available today.
3. Your claims litigation department cannot use case analytics to identify underperforming adjusters and engineers.
Insurance coverage decisions are not always easy. Although most of your independent adjusters and engineers will give you 100 percent effort, some of them will inevitably make more than their fair share of mistakes. When an adjuster or engineer makes a mistake that leads your insurance company to pay out a huge settlement, do your software systems make this information available to the people who choose the vendors?
If your litigation department doesn’t relay the “red flag” vendor case data to your claims intake team, your claims litigation department has not properly evaluated its technology opportunities.