The number of claims resolved through an inter-insurance dispute resolution organization’s services set a record in 2011, with nearly 520,000 claims resolved.
The value of those claims resolved by Arbitration Forums, a Florida-based company and the nation’s largest provider of inter-insurance dispute resolution services, was more than $2.4 billion.
W. Russ Smith, president and chief executive officer of the company, which has some 4,400 carrier and self-insured members nationwide, said in a statement that the nonprofit organization’s arbitration services save the property-casualty insurance industry more than $700 million in litigation costs annually through programs that effectively resolve insurance claims disputes.
He said that nearly 98% of the arbitration filings in 2011 were made electronically—more than twice the percentage of just a few years earlier.
Smith also pointed out that arbitration enables insurers to return deductibles to their policyholders faster, which reflects positively on customer service.
“Companies are increasingly focused on controlling their expense dollars, and arbitration offers a proven, cost-effective way of generating those savings while enhancing customer service,” Smith said.
Disputes leading to arbitration typically arise when insurance or self-insured companies believe their insureds are not at fault or disagree over the percentage of liability or the amount of damages, Smith said. More than 85% of inter-company arbitration disputes involve auto collisions.
The use of the company’s E-Subro Hub, an electronic subrogation claims system, grew by more than 200% between 2010 and 2011.
The E-Subro Hub expanded to all 50 states in 2011 and handled subrogation cases valued at more than $1.4 billion. Eight of the 10 largest automobile insurers in the U.S. moved their subrogation process to E-Subro Hub, and a projected 80% of the private-passenger auto insurance market will be using the system this year, the company said.
Insurance claims dispute resolution efforts set record in 2011 via IFAwebnews .
