1. Automobile Subrogation Benchmarking
Mark Gluodenis
Allstate Insurance
2775 Sanders Road, Suite C05
Northbrook, IL 60062
Chris McPadden
Travelers Insurance
One Tower Square, 5MS
Hartford, CT 06183

2. National Association of Subrogation Professionals
2012 Automobile Subrogation Survey
Sponsors
Arbitration Forums, Inc.
Praxis Consulting
Latitude Subrogation Services
Ward Group 2

4. What is a Benchmark?
The process of comparing performance against baseline
Internal comparison
Practices of other leading companies
Purpose of improving performance 4

5. Why is Benchmarking Important to your company?
Alignment
Measurement
Drive Performance
Continuous Improvement 5

6. Metric Definition “A metric is not simply measurement.
It is a measurement taken over a period
of time communicating vital information
about a process or activity.” Ralph Dandrea 6

7. Internal Analysis Understanding Your Company’s Business
Three-year Data History
Changes in Your Book of Business
Current Subrogation Pending 7

8. External Analysis Peers -- Geographic -- Business -- Size
Market Changes
Variables (i.e. CATs) 8

9. Apples v. Oranges? Reporting Criteria Specific Business Practices
-- Philosophy
-- Workloads
-- Organization
Results
-- Representative Sample
-- High Performers 9 9

10. “Not everything that counts can be counted and not everything that can be counted counts.”
Albert Einstein 10

11. 2012 Auto Benchmark Committee
Mark Gluodenis Allstate
Don Jones
Nationwide
Sharon J Simonetti
Mercury Insurance Group
Grace Lopes
Travelers Insurance
Sheila Lamberson
State Farm
Donna O’Brien
Rick Rectanus, CPCU Liberty Mutual Group
Cherish Diviney
NASP
Richard Snyder

12. Enhancements to study…
Accelerated Timeline
Survey Structure
Table Of Contents
Improved Glossary/Definitions
Added MP and PIP Section
Technology Utilization

13. Profile of Participants
Twenty-two carriers participated in the subrogation study. Individual company results and the names of participating companies have not been released in order to maintain the confidentiality of the data. A profile of the group follows: 13

14. Organizational Practices
Benchmark Categories
Performance
Number of Files Opened
Average Time to Closure
Total Dollars Received (% of Total Paid)
Potential Subrogation (% of Total Paid
Losses)
Number Closed with $ 0 Subrogation
Recovery
Operating Practices
Identifying Subrogation Potential
Investigating
Hiring Subrogation Firms
-- When? -- How?
Audits
Training
Organizational Practices
Workloads
Recovery Expense
Centralized / Decentralized
Service Level Standards
Philosophy
Measuring and Tracking
Personnel
Salary, Authority, Incentives,
Experience, Workloads
Expense
Organization Structure 14

15. Subrogation Performance
Number of Files Opened
Average Time to Closure
Total Dollars Received (% of Total Paid)
Potential Subrogation (% of Total Paid
Losses)
Number Closed with $ 0 Subrogation
Recovery 15

16. Subrogation Performance Management16

17. Operating Practices Identifying Subrogation Potential Investigating
Hiring Subrogation Firms
-- When?
-- How?
Audits
Training 17

18. Subrogation Legal 18

19. 19

20. Organizational Practices
Workloads
Recovery Expense
Centralized / Decentralized
Service Level Standards 20

21. Centralized/Decentralized

22. Philosophy Measuring and Tracking Performance Personnel
Salary, Authority, Incentives, Experience,
Workloads
Expense
Organization Structure 22

23. Authority

24. Med Pay and Pip

25. NASP Benchmarking Surveys
Edition
First
Second
Third
Fourth
Auto
2003
2005
2008
2012
Property
2004
2006
2010
2013
Work Comp
2011
2015
Healthcare
2014 25 25

26. NASP Industry Benchmarking Dashboard
Quarterly, semi-annual and/or annual update of subrogation performance, by line of business:
Personal Auto
Commercial Auto
Homeowners
Commercial Property
Workers Compensation 26 26

27. NASP Industry Benchmarking Dashboard
10 Key Subrogation Performance Metrics:
Average Notice of Loss to closure with recovery
Average Notice of Loss to closure without recovery
Notice of Loss to 1st Subrogation Credit Date
Calendar Year Claims Assigned in Subrogation
Calendar Year Recoveries (Ex CAT)
Calendar Year Payout (Ex CAT)
Calendar Year Deductibles Recovered
Calendar Year ALAE
Calendar Year ULAE
Count of Calendar Year Claims with recovery
Count of Calendar Year Claims with payout
Count of Calendar Year Claims Received (overall
claim notices regardless of payout) 27 27

28. NASP Industry Benchmarking Dashboard

29. Questions? 29