9/22/2016

Why Multiple Levels of Collaboration Are Critical for Recoveries

A look at the main areas where working together efficiently means success for everyone.

By Nicole Kustermann

Collaboration is defined as working “with another person or group in order to achieve or do something,” according to Merriam-Webster. The “something” we are looking at here is subrogation, and as with any type of subrogation claim—whether auto, property, workers’ compensation, health, etc.—the best results are achieved through various levels of collaboration.

The first collaboration is at the claims level. From the first notice of loss to the involvement of a claims professional, collaboration is essential. With an eye toward claims resolution and subrogation, a claims professional must work with the insured to gather relevant information for both aspects of the claim. Depending on a company’s workflow, the claims professional should collaborate as early as possible with the subrogation department. From there, the claims professional designated to follow through with handling the subrogation claim may need to work with service providers who can assist with further investigation and prosecution of a subrogation claim. These service providers might be experts, attorneys, or a third party administrator. A coordinated effort among claims professionals and service providers will encourage a higher probability of a successful recovery.

Efficient collaboration at the claims professional level is easily described in a workers’ compensation setting. For example, you have a work-related injury involving an unguarded press that results in a finger amputation. At the outset, a workers’ compensation claims professional receives first notice of the accident and works to gather information about compensability, the nature and extent of the injury, and the facts of the accident. This information is not discernable without collaboration between the claims professional, employer, injured worker, and, if possible, first responders. Subrogation efforts will be hindered without collaboration between the workers’ compensation claims professional and the subrogation department and without further partnerships between the subrogation department and outside investigators who can assist in developing a theory of liability. In such a case, a claim against the manufacturer of the machine involved is only as strong as the teamwork between the information gatherers.

The second collaboration integral to recovery success is at the company level. Subrogation efforts are most successful with a management-led emphasis and promotion of subrogation best practices. This upper-level support of subrogation efforts must be communicated throughout the company. Leaders must work with underwriting and agency groups to educate them about the company’s subrogation emphasis and how such efforts impact the bottom line and customer satisfaction. Claims managers must work with their staff to promote the importance of thorough subrogation investigations and diligent recovery efforts. Leaders of subrogation units must report successes back to claims departments and their leadership to encourage further buy-in from outside of the department. These collaborative efforts work to ensure a strong company subrogation program and likely better results and sustainability.

The third collaboration insuring best results occurs at the industry level. The collaboration among competitors perhaps is the least obvious but arguably the most helpful. The coming together of industry professionals to discuss and share common issues and obstacles is a valuable exercise that undoubtedly benefits the industry as a whole. Competing attorneys who engage in conversations with others who are handling similar claims against similar defendants can strengthen the collective position of the subrogated parties. Attacking a defendant with a cohesive, industry-wide argument is an effective tactic.

Insurance carriers coming together to strategize on common issues also is beneficial. When industry executives share ideas on how best to lead a subrogation department or engage in discussions about best practices for subrogation investigations, the industry becomes stronger. Further, the trusting relationships that are formed through this type of collaboration can propel the industry into the future and through difficult situations.

The more opportunity for industry-wide collaboration, the better. By offering educational seminars and networking gatherings, trade associations with engaged members are an effective means of fostering the sharing of ideas and varying perspectives. If asked, most members of such associations would say they benefit most from the information gained from their peers at different companies. It is the willingness to share and the acceptance by all that there is enough business to go around that makes this collaboration possible.

The opposite of collaboration is confrontation and disagreement. It is easy to see that confrontation and disagreement between claims professionals and the subrogation department would result in a lower likelihood of a recovery. Likewise, the failure of leadership to work with claims managers and subrogation managers to promote the importance of subrogation also would be destructive. Finally, discourse between carriers and attorneys on the same side of the bar does nothing to strengthen the subrogation industry.

As we move forward together in the claims world, remember the importance and effectiveness of collaboration. We were taught as children to share with others. What we were really learning was collaboration.



Nicole Kustermann is a partner with CLM Member Firm Yost & Baill LLP and the president-elect of the National Association of Subrogation Professionals (NASP). She can be reached at nkustermann@yostbaill.com. www.yostbaill.com

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