Finding qualified law firms for policyholders is top priority for The Loya Insurance Group, but knowing which firm to select for a particular case isn’t always an easy undertaking.
The auto insurance carrier is based in El Paso, Texas, but serves policyholders in 11 states through more than 526 agencies.
According to Dan Ruderman, Director of Strategic Consulting for CounselLink, the legal spend and litigated claims management solution from LexisNexis, that kind of struggle can be quite common.
“By the nature of the business, insurers need to not only make sure their policyholders are covered, but they also need to provide them with the best possible legal defense when they need it.”
The challenge, says Mr. Ruderman, is trying to protect policyholders while also operating and maintaining a profitable business. In other words, every penny they send out impacts their bottom line. That makes it critical for insurers to closely manage how their outside law firms are doing so they can know that they’re providing the best possible legal defense at the best cost.
More than a decade ago, a new CEO joined Loya Insurance and sensed that the old way of managing outside counsel wasn’t working for the rapidly growing insurance company. He tasked members of the firm’s litigated claims department to find a solution to help reign in outside legal costs and better manage the company’s overall litigation portfolio.
During their search, the team had one specific goal in mind: Find a system that provides visibility into the litigation they manage on a daily basis so they can implement an effective outside counsel management process.
After an extensive review process, the company chose CounselLink as their first-ever litigated claims management and e-billing solution in 2006. As a result of the implementation, the Loya Insurance Group controls their annual outside legal spend, while also gaining the flexibility and insightful reporting the litigated claims team needs to better serve its policyholders in three key ways:
- Smarter Decisions with Outside Counsel. Members of the Loya Insurance litigated claims department now make smarter decisions about how they assign matters to outside counsel. They use the data provided by CounselLink to track and analyze how well their outside law firms are performing with respect to claim types.
- Reporting Keeps Everyone Accountable. Prior to the CounselLink implementation, there wasn’t a good reporting system in place to keep members of the litigated claims team accountable for their business decisions. They needed more concrete answers about when to defend a suit versus settle it, or how their outside legal spend was being managed and allocated for various claims. Thanks to the benchmarking data they gain from CounselLink, the company now has comparative insight into their own data and can also see how well team members are managing their time.
- Central Claims Management System. Use of a central claims management hub enables the litigated claims team to track all suits throughout their entire lifecycle. Each suit is captured in the CounselLink system and opened daily to gain critical insight into all cases that are actively in litigation. CounselLink also tracks important financial information such as invoices that are associated with every claim.
According to Mr. Ruderman, the Loya Insurance Group represents a great example of how an insurance company can use its own data to gain greater insight into the activities and tasks their outside law firms are performing. That shows them if they are getting a fair rate for their services, and allows them to compare how well their law firms are performing against others.
That kind of information can help insurers make sure they are providing their policyholders with the best possible legal defense, while also maintaining a healthy business.