I first came across SecondLook while running subrogation operations for a large multinational insurance company. In reviewing internal audit results and random files, it was evident that our adjusters were closing files that may contain subrogation.
Why was this happening? As is the case in most situations where opportunities for improvement exist, there was a combination of factors. First and foremost, adjusters are busy. They are continually asked to do more with less and measured on a variety of metrics. Simply put, things can fall through the cracks.
In fact, it is estimated that 15% of all claims are closed with a missed subrogation opportunity at an annual cost to the industry of over $15 billion dollars. When SecondLook approached me with a unique business proposition to identify missed subrogation at NO CHARGE, it was a no-brainer. They reviewed files that had been closed by liability adjusters where no subrogation had been identified. In the end, they identified a large percentage of claims where subrogation was overlooked. The net result for our organization was $5.4 million dollars.
Why were recoveries missed? Sometimes it was a simple error. Other times it was an evident case of comparative negligence where the adjuster did not apply fault properly. In more complex situations, it involved contribution or PIP loss transfer. What we learned was that there is always money to be found by reviewing closed files.
While the review process sounds simple, it involves a fair bit of strategy that leverages both technology and our combined six hundred years of claims expertise to narrow down claims where subrogation has likely been missed.
While many in the industry are getting ever more reliant on missed opportunity identification algorithms, our tact is slightly more traditional. Scientific ID methodology is a good start and is part of our process; it only gets you part of the way there. Given the state of technology today, it is estimated that an outstanding identification algorithm can find about 80% of the subrogation opportunities. What about the other 20%, which can often be a disproportionally higher percentage of recovery dollars? That is where SecondLook’s Chameleon technology capabilities come into play.
Chameleon is a proprietary blend of ID models, machine learning, AI, and extensive domain expertise that is unparalleled in the industry. By finding things that first, or even secondary reviews miss, we provide our clients with a win.
To demonstrate how this works, SecondLook deployed their technology at a large Top 10 insurer. We went in on a tertiary review to identify what the liability adjusters and the carrier’s primary subrogation vendor had missed. In this review of 100,000 files, we identified and recovered subrogation on over 400 (.4%) claims where both reviews failed to recognize the subrogation.
How carriers utilize our skills varies widely. For some, we handle all of their subrogation needs. For others, we handle only challenging and time-consuming aspects. The best use for the SecondLook team is wholly dependent upon what the carrier desires. We are not a one-size-fits-all, but our unique guarantee that we will always find money is something that is appealing to our growing number of clients.
At a time where competition is fierce, and pressure is on to maximize recoveries while lowering expenses, it is beneficial to have a partner who can both understand your needs and provide services designed to drive results.
While nobody knows how much money is buried in closed files, we do know that money is there. If you are interested in daring to take a SecondLook, we are here to help you find that money….at no charge.
Christopher Tidball is an Executive Claims Consultant with over thirty years of claims experience. Beginning as an adjuster, he served in various management and executive capacities for multiple industry-leading carriers. He is a recognized expert on claims process improvement and strategic technology. He is a frequent speaker at industry trade shows and the author of multiple books, including Re-Adjusted: Taking Your Claims Organization From Ordinary To Extraordinary!
I can be reached at (904) 742-9031, or EMAIL ME.