The Challenge of Subrogation

NASP helps keep the education and communication flowing.

August 03, 2009 Photo
Subrogation plays a critical role in the success of today’s insurance companies, and there is one organization dedicated to subrogation—the National Association of Subrogation Professionals (NASP). NASP’s number one priority centers on providing educational opportunities for subrogation professionals, whether they are insurance claims professionals, attorneys or service providers.

NASP’s annual conference is the premier subrogation learning event in the United States and, along with their other education events, provides a much needed communication forum.

“NASP events afford me the opportunity to work with other executives and spend specific time concentrating on subrogation,” says Robert Bowers, executive, Claims Staff Operation for Westfield Insurance. “Through the discussions and takeaways from the NASP executive forum, we at Westfield can better understand industry trends and practices. This knowledge assists us in ensuring that our management, claims professionals, and subrogation staff work in concert, and that produces mutual benefit throughout the whole claims and subrogation process.”

Most insurance carriers recognize the financial impact of subrogation recoveries on overall financial performance as a key strategic initiative; however, until recently, there was never a benchmarking study dedicated just to the field of subrogation. NASP has commissioned studies in auto, property and workers’ compensation, and they recently created a benchmarking committee to develop survey questions for an upcoming Healthcare Subrogation Benchmarking Study.

There are new people coming into claims operations every day—that’s just the nature of business. However, developing expertise in the area of subrogation is of particular concern.

“The licensing of our people in multiple states, as well as the understanding of various jurisdictions and the legal issues involved, means that you have to be an expert at this to really be a true subrogation professional. It can’t be a sideline job. It needs to be something that you’re focused on,” says John Fouert, vice president of Claims for State Farm Insurance Companies. “In the last few years, companies have been very successful at creating more professionalism around subrogation—equal pay and strong management have led to people seeing it as another worthy opportunity within the organization.”

From an internal standpoint, NASP events allow discussions on how to get internal departments and personnel aligned to the degree necessary for collections to take place efficiently. Externally, they look at what’s happening with legislation and regulations—the things that might be threatening a company’s ability to collect and return deductibles back to the insured.

Legislation Has Critical Effect on Consumer Rates
With critical legislation on the horizon, not only subrogation professionals should be informed. Legislation, such as New York state bill No. S04080A that has the potential to cease subrogation efforts in that state, impacts everyone. If companies cannot collect subrogation dollars, deductibles won’t be returned, and it will impact rates and premiums because part of the money collected goes into operating the business. It’s no good for the insurance company. It’s no good for the consumer.

While not the most easily understood area of insurance, subrogation is a critical part of providing the best rates possible for policyholders, and NASP is doing its part to provide education and communication opportunities for all involved. Check out to learn more.
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