Current Challenges
Insurers everywhere face familiar challenges to reducing the time and cost of manually processing subrogation claims, especially when litigation is required. These challenges include:
- Multiple iterations of data reconciliation
- High administrative costs and communication problems due to the involvement of multiple parties
- Delays in recovery processing
- Periodic settlement of subrogation claims using a bank as an intermediary
- Lack of single view of all the information connecting multiple participants
Thankfully, these are challenged where the blockchain can help.
Most people have heard of the Blockchain as it relates to cryptocurrency, but this financial technology (FinTech) is being applied to other transactions as well. This provides an automation mechanism to more efficiently manage the subrogation process, significantly reducing costs and processing times for insurers.
Solutions
What are some of the subrogation process challenges the Blockchain can improve?
- The Blockchain acts as a digital ledger, shared transparently in the Cloud across multiple participants, thereby helping to secure a single source of information that helps eliminate the problem of missed or relinquished subrogation claims.
- Additionally, smart contracts in the Blockchain automate the business process, minimizing administrative overhead. This reduced cost of effort changes the ROI calculation for subrogation claims of lower amounts, allowing an increase in recovery amounts.
- Furthermore, a distributed digital ledger stored on the Blockchain enables instantaneous reconciliation between the claiming insurer and the insurer of the party at fault, reducing manual reconciliation errors and preventing monetary loss.
- Finally, prolonged recovery time is often expensive in the subrogation process. Smart contracts enable automated refunds of the deductible to the insured and transfer of salvage recoverable to the insurer of party at fault, resulting in a significant improvement in cost and the recovery process in your subrogation claims.
Maximizing Your Outcomes
Cryptocurrency may sound new and strange to some, but it’s just a digital technology for securing and sharing information online, like a recorded video call can keep a record of a conversation. For insurers seeking to maximize the financial outcomes of their legal claims, it’s a gift. Insurers and subrogation agencies can even use the Blockchain to coordinate with and securely transfer claim documentation to attorneys when litigation is required. The National List of Attorneys (The NL) maintains information about law firms with proficiency in Cryptocurrency and the Blockchain, which reduces the time and cost associated with legal action.
The NL is here to help you make the most of this opportunity through NL Envoy, a data-driven, litigation-management service for subrogation matters today. For clients with subrogation claims that want to significantly reduce the cost of litigation and more, we’re here to help.
How are you managing your subrogation claims lately? Join the discussion in The NL Community Forum on LinkedIn and let us know!
About The National List of Attorneys (The NL)
The NL is the online B2B networking hub where premier contingency-fee attorneys connect and work with the business clients who need their help to get paid what they’re fairly due. We use claim performance data to provide the best legal referrals, advance the legal industry’s use of technology, and develop tailored client-focused strategies to maximize financial outcomes of legal claims.
Categories: Insurance, National List, NL Insider
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