New US research into cost control in management of litigated claims
CT TyMetrix has announced the results and availability of its Cost Control in the Management of Litigated Claims research report. In today's down economy and competitive business environment, insurance companies are facing new levels of pressure to control costs – especially in terms of litigated claims expenses. CT TyMetrix commissioned research to better understand and analyze the impact of these cost-control measures and to identify directional benchmarks and best practices to help insurance companies assess and streamline their operations.
As insurance companies see the number of claims going to litigation continue to rise, the management of these claims costs is becoming increasingly critical. According to the survey, 87% of respondents said they were experiencing significant or moderate cost control pressure on their claims departments. Additionally, most expected claims volume to increase in the next 12 months. The CT TyMetrix report looks into these trends, including the likelihood of litigation by line of business, successful outcomes in litigation claims by line of business and a 12-month forecast of litigated claims frequency and cost. Survey responses include:
• Product liability and construction defect were the types of claims most likely to be litigated; personal and commercial auto, workers compensation and subrogation were the least likely.
• Areas of litigated claims most likely to achieve successful outcomes included breach of contract, subrogation and personal auto; product liability and workers compensation were the least likely.
• Employment, construction defect, commercial auto and breach of contract expected claims volume to increase in the next 12 months; workers compensation, construction defect and personal auto expected it to decrease.
CT TyMetrix also surveyed respondents on different strategies and technologies for claims organizations to adopt to better manage and cope with rising cost-control pressures for claims. They included:
• Deploying Predictive Analytics Solutions: 57% of respondents said using predictive analytics for assigning resources and controlling costs had a significant impact on their organizations. Predictive analytics empower claims organizations to decide on the cases that are best for litigation and the ones that are best for settlement, improving the rate of successful overall outcomes.
• Forecasting Future Litigated Claims Expenses: Three in four respondents (75%) cited the ability to forecast future litigated claims as an area of focus for their organizations in the next 12 months.
• Implementing Alternative or Fixed-Fee Arrangements: Only one in four respondents (25%) said that alternative or fixed-fee arrangements -would be of significant value in the next 12 months. Most said they are not likely to become immediate tools to control litigated claims costs.
• Improving Workflow Processes with Outside Counsel: While most respondents were highly satisfied with their workflow processes with outside counsel, three in four respondents (75%) said there was a significant desire to continuously improve these processes moving forward.
The survey was conducted between May 2009 and June 2009 and reached 98 respondents representing 90 separate insurance organizations. You can request a copy of the entire report by going to www.cttymetrix.com and clicking on the research report's link at the bottom of the home page.