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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
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.

• 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.

• 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
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.

• 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.

• 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
A company utilizing several outsourced subrogation vendors was interested in benchmarking each firm’s performance.

• We gladly participated in an audit and proactively suggested categories to include in the audit that reflected both corporate and end-user satisfaction.

• 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.

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