Advertisement

http://insurancethoughtleadership.com/wp-content/uploads/2014/04/bg-h1.png

Facebooktwitterredditpinterestlinkedinmail

September 25, 2012

Selecting, Evaluating and Building Partnerships with Subrogation Vendors

Summary:

Having the right tool for the job is the most critical component of accomplishing the task. You may just need a bigger toolbox.

Photo Courtesy of

If instead of being a subrogation professional, you chose to be a carpenter or a finish woodworker or a landscaper, the question of how best to accomplish the task at-hand would be easy for you … utilize the tool, or tools, the job demands to get the best possible results. The same applies in the field you did choose to work within. The tools take a different shape or form, but they’re “tools” just the same. Instead of a hammer or a rake and shovel, your tools might just be called “vendors.” And just as with the more conventional definition of tools, selecting one begins with determining what has to be accomplished …

Identifying Your Needs
While many claims appear on the surface to be similar to the untrained eye, you know better. Each has its own unique characteristics. Consider this: two claims come to you from the same adverse party. Both involve (allegedly) the making of an illegal left turn at an intersection controlled by a light with a left-turn arrow. One claim may involve a total loss, while the other may be nothing more than the scratch-and-dent variety. Different levels of damages incurred may very well translate to differing levels of complexity, and different needs of your use of outside agencies, vendors, to successfully handle the claim and satisfy your needs.

The tools required to complete the job are most certainly different between an auto loss needing bodywork, and a home fire loss needing cleanout and restoration expertise. Even within a home loss, the devastation from a fire requires a different type of expert investigator than damage from a leaking hot water heater that may have been caused by a manufacturing defect, faulty installation, or a component failure.

An employee injured in an automobile accident during the performance of their job calls for a different set of “tools” than a passenger in one’s car needing to visit the emergency room as a precautionary measure.

The commonality of the above of course, is that the subrogation professional needs to evaluate liability apportionment first and foremost. Once responsibility for the loss can be ascertained, a thorough, accurate accounting of the damages sustained is needed as well. This is obviously not a one-size-fits-all undertaking. A cause-and-origin investigator and an independent adjuster will have dramatically different skill sets or analytical expertise knowledge bases. Knowing your circumstances will help you determine the type of person you need to hire. Remember, every day brings new claims, and new claims bring new challenges.

The optimistic reality though is that solutions exist.

What’s important to acknowledge is that these solutions may be type-of-loss specific in some instances, while being region or locale specific in another. They could also be line-of-business specific. Regardless of your organization’s size, no one can perform optimally in a vacuum. Everyone can benefit from looking outside their organization for people specializing in services that meet the identified needs. And whatever you do, don’t discount that the elimination of an outside vendor might be just as important as knowing which ones you want to rely on! To take it a step further, your “outside” resource may not be outside at all — that resource may be another co-worker or specialist within your own company.

Sometimes the more narrow the scope of one’s expertise, the more accomplished they are in that area of need. Think of the medical profession: cardiologist, podiatrist, neurologist, the list seems endless. To fulfill a need that calls for a cardiologist, you’d never consider seeking out one of the others mentioned.

The same applies to subrogation.

First seek out an expert in the specific area of need you’ve identified. Then seek out the best. Ask your colleagues for recommendations. Word of mouth advertising is powerful, both positively and negatively. It can help you find a diamond in the proverbial rough, or it can help you avoid falling prey to someone who talks a better game than they actually deliver.

Finding the Best Fit
In addition to utilizing colleague recommendations, one practical tip for selecting a vendor is to attend industry conferences and trade shows. For subrogation professionals, this means including the National Association of Subrogation Professionals (NASP) annual national education conference on your “hit list.” As important as their breakout sessions have proven to be, just as critical to the attendee is time spent in the conference Exhibit Hall. One of the great benefits of a conference like this is in one setting you can meet with peers from other companies, resource partners, and experts that can fulfill a wide variety of specialized needs. It’s time-efficient and cost-effective because you don’t have to jump on separate airplanes to meet them.

And the best part?

No two vendors are exactly alike. You can have discussions and discover that it’s not at all unusual to develop new ideas regarding your current claim inventory. You’ll return home with practical tips and solutions. The people you meet in an Exhibit Hall are universally passionate about their niche in the industry, and they’ll be more than excited about sharing with you what makes them unique, what makes them better.

Your job becomes accumulating as much information as you can, then determining which service provider can best meet your needs for any given scenario. After that, go get them and put their feet to the proverbial fire. Make them justify why they’re the best choice to give you the results you expect. Ask them point-blank why you should choose them instead of their biggest competitor. Ask for references. In particular, beware of the vendor that criticizes their competition instead of promoting their strengths. There’s a saying in business that goes like this: if the competition doesn’t lie about us, we won’t tell the truth about them! In other words, don’t select a vendor based on what they tell you someone else can’t do; select a vendor based on what they can do! Let their results, let their success with their clients, be their judge.

And after all of this, remember, your colleagues will benefit from your efforts at these events.

Evaluating Vendor Performance
Once you’ve selected your vendor(s), make a point to evaluate their performance at least quarterly. Above all, never become complacent with your vendor selection. If their level of customer service drops off, they may be taking you for granted. Complacency leads to declining performance and stale results. Always strive for better. Ask your vendors to provide you with reports that quantify their performance, and ask them to analyze it for you. It forces them to identify, potentially, their own weaknesses or areas of improvement need. Benchmarking these results against those competing for your business also ensures that the one who does the best job for you is the one you’re utilizing the most.

If a product or service you are paying for is not meeting your expectations, don’t hesitate to make a change. The short-term inconvenience of incorporating a change may very well result in significant long-term benefits for you and your company. Don’t settle for an inferior product or service. Even if you invest more of your “capital” (time and money) into possible alternatives, you’ll either ensure you’re using the best solution for you, or you’ll realize who not to use. Sometimes addition happens as a result of subtraction.

Above all, never let time be your decision maker. A hurried decision often becomes a wrong decision. The right solution (or more likely solutions, multiple) is out there. Once you find them, challenge them. But challenge them while fostering the relationship with them. Turn them into genuine partnerships.

Having the right “tool” for the job is the most critical component of accomplishing the task. You may just need a bigger toolbox.