What a Difference a Year Makes

What a Difference a Year Makes

Ryan Park Grant

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One year ago, I told you a story about a VP of Claims who staffed up to improve her subrogation collections on personal auto claims, and I mentioned that we would continue supplying her with updates on this chart because the story wasn’t over. Since those dispatches run automatically through Guidewire Live’s MetricMail feature, the issue drifted to the back of my mind until curiosity nudged me to take a look recently. I was both intrigued and impressed by what I found on the latest chart:

  • Subrogation for accident year (AY) 2013 caught and passed AY 2011, the previous frontrunner. Improving AY 2013 collection was the focus of my original blog, so I was pleased to find that the initial uptick I documented a year ago indeed fulfilled its promise.

  • Collections for just-completed AY 2014 closely followed prior best performance and are currently ahead of schedule. This happy development indicates that the customer’s initial emphasis on subrogation continues to bear fruit on more recent claims.

  • So far, so good. What I did not expect to find is that subrogation on older claims occurring in AY 2012 also improved dramatically and replaced AY 2011 as the top performer. I had written off AY 2012 as a lost cause. However, most U.S. states allow subrogation requests until at least two (and often three or more) years after the accident, so the new team members could (and obviously did) dig into the AY 2012 backlog after joining in July 2013. Because I cut off my original chart at 18 months, I did not notice the startling recovery that was already in progress: I failed to heed my own warning that subrogation should be tracked well past the end of the accident year. Fortunately, our customer did!

  • As a curious aside, I note the peculiar lull that always occurs in January following the accident year (month 13). I am amused but not surprised: as humans, we are motivated by year-end goals. But precisely because it is natural for us to slack off after a milestone has passed, continued management attention and tracking is all the more necessary and valuable.

Whether or not you find these details as fascinating as a data geek like me does, let them not obscure the main point: by identifying her subrogation problem, switching resources to address it, and following up with performance tracking, our VP was able not only to make up the gap but to exceed prior collections. We at Guidewire Live celebrate our customer’s success and are proud that we could play a small role in increasing subrogation by almost 1% of collision indemnity paid. That may not sound like much, but for her company, it is worth over $600 thousand per year. How much is it worth to you?