Insurance executives should be asking a lot of questions right now. They should wonder why their outside law firms haven’t adopted available technology that could eliminate expenses for routine legal work. They should ask their law firms why, despite taking in millions of dollars in legal fees each year, they have not invested a penny in creating predictive analytics tools. They should also ask why they have to start off each and every case as if it was the first of its kind.
In Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve, I am going to share what I have learned while developing my insurance litigation management software. To build it, I had to study project management, document automation, knowledge management, predictive analytics, alternative fee arrangements, transparency and more. While other industries are thriving using these systems, the insurance defense legal industry has lagged behind.
If all of the parties in this industry can come together and apply these solutions to insurance litigation, everyone will benefit. Find out why in Digitizing Claims Litigation: Providing Insurers with the Power and Control They Deserve.
If someone said you must be responsible and lead one of the two following projects, which one would you choose?
- Build a commercial building;
- Copy and paste a few dozen pages of Word documents and send another few dozen emails?
Most of you would choose the second task. The second task seems easier. The second task seems like it would take less time to complete. The second task also seems like it would cost less. Without any additional information, you probably feel more comfortable choosing the second task because it appears easier to predict the outcome.
The second choice is easier; however, sometimes it takes longer to complete than a commercial building; it costs more than constructing a commercial building; and it has a much less predictable outcome than constructing a building.
You might think that sounds crazy, and you should.
The second task, as it turns out, is the legal services for defending an insurance claim in litigation. Yes, defending a homeowners insurance claim is easier than building a commercial building; however, it can still cost more than building a building, take longer, and be less predictable.
Why? One reason is that contractors that build commercial buildings rely on project management principles to meet their clients’ expectations. Attorneys, on the other hand, are merely emailed a file and asked to reach a result.
What is Project Management?
Essentially, project management is a systematic method or group of methods to meet an objective.
Step one is to break down the full task into its components. From the design of a website to the building of a skyscraper, project management is instrumental in accurately budgeting, planning and executing with predictable results. More specifically, project management consists of the following components and disciplines:
- Establishing the client’s end goal of the project;
- Identifying what must be done to meet that end goal and the risks involved in doing those things;
- Drafting a project plan;
- Mitigating the identified risks;
- Executing the plan;
- Monitoring the plan’s execution;
- Reviewing the plan’s execution and the outcome; and
- Continuously improving the plan to achieve the client’s end goal in more efficient steps.
The Role of Project Management Software
Please take a long, hard look at the steps above. If you genuinely evaluate how to follow through on these steps, you will have no choice but to use technology to assist you with certain steps along the way. Technology – including an interface for entering data and a document assembly engine – can perform routine tasks better than attorneys. Equally as important, technology can minimize inefficiencies and save the clients’ time so that they can do what they do best – critically thinking about how to efficiently resolve cases.
Building Your Homeowners Insurance Litigation Skyscraper
When insurers implement litigation project management to their claims and cases, they will strive to build the skyscraper of legal systems, including:
- Decreasing loss ratios, which means increasing stakeholder profitability;
- Increasing the predictability of fees and costs;
- Minimizing surprises;
- Streamlining communications;
- Managing risk;
- Improving reporting on finances and strategies; and
- Engaging in continuous improvement of all of these systems by measuring results.
How can insurers reach these towering goals?
- Using aggregated historic case data to identify the benchmark for resolution;
- Creating not only a budget, but a scope of work for reaching the goal;
- Utilizing litigation project management software to automate and eliminate routine, manual tasks that are performed better by software;
- Implementing litigation project management software to reduce the routine, mundane communication so that it does not distract insurers and attorneys from focusing on the end goal of resolution;
- Measuring the powerful data that is now being captured in searchable, sortable software; and
- Continuously improving the project plans, systems and outcomes.
Build Your Skyscraper Today
If you are interested in building your litigation project management skyscraper, there has never been a better time to do it. Software continues to get less expensive and more dynamic. In legal industries other than insurance litigation, there are dozens of innovative legal service providers embracing software’s abilities to perform certain litigation related tasks better than lawyers, and at a fraction of the costs. Even more, these innovators are striving to spread their wings into new industries. These providers are eager to undertake the massive efforts towards building these systems. The opportunity for them is enormous.
Insurers: take advantage of this market that is ripe for disruption. Hire experts to build your system, and watch the loss ratios drop significantly. Do it now because once the next catastrophe hits, it could be too late.
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