Making Claims Data Actionable for Litigation Management

Claims organizations are sitting on a treasure trove of data and information, but making it actionable can sometimes be a challenge. This is especially true when dealing with litigation management. Insurance companies already have great experience making data actionable through their work on the underwriting side – it’s really just a matter of time, knowledge and guidance before they learn to apply the same savvy to litigation management.

The challenges of litigation management never change:

• What is the severity of this case?

• Which firm will deliver the best outcome at the lowest whole case cost?

• What factors influence indemnity payout?

To find solutions to these problems, claims departments should consider a consolidated litigation management solution, which can help them trim claim and expense costs, streamline and automate workflows, and enforce best practices. Insurance claims departments can, and should, better think about and leverage data as it relates to litigation management in order to aid in decision making, better manage outside counsel, and facilitate cost savings.

An insurer’s claims data contains valuable metrics about the claims department, staff counsel, and outside counsel. However, simply implementing an e-billing and matter management system doesn’t automatically allow a company to fully realize the potential of the claim department’s data. A consolidated litigation management solution should report on those metrics and enable a company to use those metrics to optimize the claim department’s performance through better financial management, stronger law firm engagement decisions, and more effective strategic planning.

To start, one should take an inventory of which systems are in place to collect data from including the claims system, billing system, and matter management system. With those three systems in place you already open the door to a treasure trove of data that ranges from law firm to case type to outcome.

With this level of data to sort through and pull from, departments can create a view of data to take litigation management to the next level. But let’s take a step back to access how these parts come together.

Aid in Decision Making

Automating the litigated claim and expense lifecycle with tasks, routing, rules and fee guidelines enables you to enforce limits, gather approvals and improve operational efficiency. Combining the benefits of being able to estimate spend at both macro and micro levels with enforcement tools allows insurance companies to monitor adherence from the top down and bottom up including:

• Create top-line estimates and component part bottom-line estimates (budgets for individual matters and law firms)

• Receive enforcement alerts to let you know when estimates-to-actuals are reaching thresholds

It is important to share information in an organized manner across the claims department to reduce the growing enterprise-wide expense pressure. Because it costs more to operate and train on multiple systems, implementing a consolidated platform helps insurers respond to expense pressure.

Greater Transparency

With the right technology you can avoid surprise and unexpected claims results. By implementing a comprehensive view of litigated claims data that advances development and implementation of claims management strategies you can forge a clearer path.

In billing, you can increase visibility through e-billing systems helps detect duplicate and erroneous payments as well as invoices that are not in compliance with insurance company guidelines. With matter management systems, the claims organization has insight into activities and schedules to meet critical case deadlines. Matter management systems also provide company management with a view into the activities of the claims department and lawyers, as well as easy access to the details of any individual litigated claim.

Better Manage Outside Counsel

Understanding what drives your litigation expense helps you improve it. It is only when you can unlock insight into critical litigation management data such as law firm rates, cycle times, task and activity concentration and staffing models that you can effectively gauge what firm is right for what job.

At the outset of a claim, a litigation management system can incorporate a rules-based approach to help staff determine not only what type of cases should go to outside counsel versus staff counsel, but also which specific inside or outside resource should be assigned the case based on past performance and areas of expertise.

Managing litigation is not just about reviewing bills; it involves actively overseeing each case. This includes managing documents, diaries, and communications by case, and having the ability to effectively collaborate with both staff counsel and outside counsel on these items. It is key to provide an organized strategy for important case documentation. Documents are not limited to invoices and include a whole host of correspondence, diaries, and communications.

Collaboration is also essential to robust document management and effective matter management. The litigation management solution should therefore provide the ability for claim managers and the assigned attorneys (staff counsel or outside counsel) to create, assign and update tasks for matters, invoices, vendors, timekeepers, or client users from the same system. Rather than creating only a simple listing of projects, the system should provide task associations that deliver active reminders of what needs to be completed as well as the link to the actual work area, ensuring that team members can quickly navigate to priority tasks.

Facilitate Cost Savings

Manual processes are notoriously inefficient. An automated solution not only delivers greater transparency into the litigation process, but also increased efficiency into the workflows of litigation management. Automated workflow enables claims departments to streamline, automate, and eliminate manual processes, rather than physically routing approvals and requests around from one area to the next.

With the entire claim department’s data at management’s fingertips, the department is better able to add value to the organization with metrics that identify best practices for both staff and outside counsel. The department can compare case cycle times, team concentrations, budgets, risk management profiles, outcome information, and more, allowing it to allocate resources more effectively and identify those staff lawyers and outside law firms that bring the most value to the company.

Powerful business intelligence and insight can reduce costs and improve outcomes for claims organizations. Insurers have seen the benefit of deploying technology to control costs and better manage litigation in the claims department. Implementing a consolidated litigation management solution helps insurers trim claim expense costs, streamline and automate workflows, and enforce best practices throughout the claims discipline. The end results are better decision-making and improved case outcomes, which benefit not only insurers, but also their investors, agents, and customers.

About the Author:Hans Bengard is national director, Insurance Industry Solutions at TyMetrix .