As insurers seek to modernize systems and processes to enable growth and drive efficiency, there is still the need to support existing policyholders and manage regulatory compliance. The goal to move quickly and take advantage of new technology and capabilities is tempered by aging systems and processes on which the business relies. McKinsey refers to modernization as a business transformation and advises to “manage the transformation complexity and deliver value incrementally with a structured road map.”* This reference is to a core system upgrade but the same principle can be applied when considering a modernization to any long standing process.
Updating any existing system or process always takes time. It takes effort and money to evaluate, gain approval, secure budget, decide technical infrastructure, security reviews, implementation, update operational procedures - you know the list, and it is long and daunting. Any steps that can be taken to shortcut these exhaustive steps are a benefit. To quote McKinsey further, “The initial phase could focus on quick wins that align with business priorities, delivering early success to build momentum and refine processes.” Finding quick wins is crucial to validate a business case and can often result in the further approvals or stoppage of projects. The initial lift should be easier and advance the broader initiatives more quickly. Here we turn to the opportunity to modernize subrogation with an approach that is a quick win.
Subrogation is a parallel process to claims processing that when done effectively can help an insurer recoup funds rightfully owed them from the liable party(ies) involved in an incident. It has its own set of governing rules which requires experts to scrutinize the details of claims and the applicable governing rules to identify the most viable subrogation opportunity to pursue.
Claims fraud detection is also a specific function of claims processing with its own focus on ensuring that claim payouts accurately reflect the losses incurred and are not exaggerated or falsified to cause a larger payout than is appropriate. Special Investigation Units are busy reviewing the details of suspicious claims to protect the insured and the insurer.
While these are two distinct processes, the data used to examine the claim is largely the same. It is this overlap that creates an opportunity for insurers to gain synergies and advance subrogation efforts as a natural extension to claims processes.
Existing Shift Claims Fraud customers are in a unique position to leverage this capability and bolster subrogation recoveries. Because the majority of the fields needed to add subrogation detection are already present in the data sent to Shift, this is a quick win to modernize the subrogation detection process. Adding subrogation checks numerous boxes that otherwise slow transformation efforts. Synergies gained to qualify this as a quick win include:
The above factors should also be considered in a buy vs. build evaluation. If you are considering modernizing your subrogation and building internally is a consideration, these benefits likely outweigh the time spent building a solution in-house. The development time and investment will cause a significant lag in your modernization efforts. For subrogation initiatives that is a cost-benefit analysis that impacts real recovery dollars. Spending time and money developing in-house creates a delay. Leverage an existing product that is complementary to your existing environment and impact the bottom line sooner.
Modernization initiatives take time, here’s an opportunity to advance subrogation faster and start recovering more. Learn more about Shift Subrogation
Attend our upcoming webinar, The need for speed: A Recovery Checklist
* Source: McKinsey insights