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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 adjusters to handle the volume, sometimes too many. Outsourcing eliminates this utilization problem. Paragon has the staff and flexibility to ensure that 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.
We structure our pricing to ensure that we get paid based on our actual performance. When other firms may settle for less, we go further to maximize your recoveries and improve your cash flow. Our recovery percentages and amounts are consistently among the best in the industry as a direct result of our willingness to go the extra mile, coupled with our expertise across multiple business lines.
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.