Outsourcing Makes Sense
Case Studies
Outsourcing Makes Sense
Today, many firms are outsourcing their subrogation work to
third party administrators like Paragon. They are benefiting
from both cost savings and increased collections, leading
to a significant return on investment (ROI).
Costs are saved by not having to pay the salaries, benefits,
and associated managerial and overhead costs to support an
in-house claims department. Internal departments typically
do not have the flexibility to quickly adjust staffing levels
to align with claim volume—sometimes there are too few
collectors to handle the volume, sometimes too many. Outsourcing
eliminates this utilization problem. Paragon has the staff
and flexibility to ensure the optimum number of people is
always assigned to your file volume - no more, no less.
As outsourced firms primarily rely on retaining a percentage
of dollars actually collected, the client and the company’s
incentives are aligned. The outsourced firm invests the effort
and only gets paid when its collection efforts are successful.
This incentive, in Paragon’s case, leads to higher than
average collection rates and higher net subrogation recoveries
for our clients.
The math is clear. Calculate how much money your claims department
is costing each year to maintain and subtract that from the
total recovered dollars. This is your net subrogation recovery
amount. If outsourcing to Paragon costs less (in terms of
fees) than your internal department, and our collection percentage
is better than what you are currently achieving, the ROI will
be significant.
For a no-obligation ROI analysis on whether outsourcing makes
financial sense for your firm, click
here to contact us.
Case Studies
Following are real examples of how Paragon has delivered results
by utilizing our experience, integrity and superior service
to drive higher returns for our clients.
Case Study A
Rental Car Company—a focus on Superior Service
Situation
A major Rental Car company was utilizing multiple subrogation
vendors and unhappy with the varying levels of service in
two key areas: turnaround time for questions, and files returned
to client due to incomplete data.
Actions
• After reviewing the client’s internal processes
and our work process, we redefined our “standard”
turnaround times to work within their process flow and meet
their expectations.
• Then we reviewed the types of data typically missing
from the client’s files. After analyzing the files,
we designed a more detailed information collection process
that did not create additional work for the client.
Results
• We immediately began answering client requests the
same business day, while other vendors were taking multiple
days. Within 3 months, our experienced staffers we were fielding
client requests within hours.
• To address the missing data issue, rather than returning
the file to the client, we utilized additional collection
methods and successfully secured the critical data in more
than 50% of the files without further client effort. This
significantly improved the time elapsed between file receipt
and collection of funds.
Case Study B
Major Insurance Company—a focus on Experience
Situation
A major insurance company utilizing other subrogation firms
felt that the returns were not as robust as they could be.
The client approached Paragon to request that we initiate
work on Uninsured Motorist files to ensure that they were
receiving maximum returns.
Action
• We worked with the client to understand their business,
their preferred method of handling claims, and their recovery
goals. Leveraging our experience in UM collections, we identified
potential opportunities for deeper collection efforts and
documented progress on a file-by-file basis.
• Once the scope of the opportunity and the expectations
were agreed upon, we assigned a tenured team that had particular
expertise in UM collections to the account.
Results
• Paragon was significantly more successful than the
client’s previous vendors. Paragon was able to collect
on two files out of every three, while other subrogation firms
only collected on one.
• Not only did Paragon collect on more files, by utilizing
our experienced staff, we were able to collect more on a per-file
basis as well.
Case Study C
Midwest Corporation—a focus on Integrity
Situation
A company utilizing several outsourced subrogation vendors
was interested in benchmarking each firm’s performance.
Action
• We gladly participated in an audit and proactively
suggested categories to include in the audit that reflected
both corporate and end-user satisfaction.
Results
• In categories that included recoveries, appropriate
actions, how fast we worked the file, and customer feedback,
Paragon consistently scored in the high 90s, and finished
first or second in every category.
• The percentage of files Paragon collected on was greater
than our competitors both in number of placements and dollar
amount.
• Paragon, unlike its competitors, had no financial
errors in our client accounting and therefore did not have
to reimburse any money to the client.
For more information on how Paragon can help your company
realize higher returns, click here.
