Why Insurance Carriers Should Pursue Subrogation (and Why You Need a Subrogation Partner)

Subrogation is a tricky one to explain to those unfamiliar with the ins and outs of the insurance industry. But it’s critical for carriers to understand.

What Is Subrogation?
Subrogation allows insurers and self-insureds to recover incurred costs — such as medical bills, auto repairs, property payments, and deductibles — from the responsible party or carrier involved in the claim. It is the insurance company’s legal right to pursue a third-party responsible for the damages caused to the policyholder.

Why You Should Pursue Subrogation

• Subrogation can lower the overall combined loss ratio, and thus, effect the insurer’s bottom line.
• Subrogation money can keep the future cost of premiums in line with the market, and therefore, provide a benefit to the customer.
• Successful subrogation can maintain the retention of policyholders who are satisfied with reimbursements of their deductible through the effort of the subrogation process building brand loyalty.
• By implementing and integrating subrogation it into corporate strategy, it helps to educate company employees on what subrogation is and its importance to the financial success of the carrier.
• Funds belong to the carrier or insurer, and so not recovering leaves money on the table.
• With a continued increase in costs for adjusting expenses, claims, catastrophic losses, legal expenses, etc., carriers need to look for outside source of revenue, i.e., subrogation.

Why Have a Subrogation Partner?

• There is typically no up-front cost for subrogation as the recovery is associated with a contingency fee. No recovery, no fee.
• Carrier employees can focus on other claim handling aspects, i.e., timely investigations, accurate and swift payment of claims, and precise coverage decisions.
• Closed file audits or reviews can be completed to verify missed opportunities for recovery.

For more information on our subrogation services, please visit our Subrogation Management solutions page.