However, applying technology to streamline the litigation process has proven difficult due to geographically dispersed carrier claims personnel and law firms. Traditional software models, which require installation and maintenance at all insurance company and law firm sites, present too large a logistics challenge to be a viable alternative.

Fortunately, new software solutions supported by the application service provider model have made the challenge of efficient claims litigation one the insurance industry can meet. By enabling effective collaboration, improving process efficiency and redirecting focus to core business tasks, ASP-based solutions can unravel the knots in the claims litigation processes.

The ASP represents a literal re-invention of the software industry. Through the use of the Internet as a wide-area network, ASPs are essentially third-party service firms that provide a software “rental option” in contrast to the traditional purchase-and-install software model. With little to no investment in technology infrastructure or technical staff on the part of the carrier or law firm, ASPs offer an easy and affordable option to the real-time communication, collaboration and accountability necessary for effective litigation management.

An ASPs security layers, which encrypt data flow such that only intended recipients can view the transmission, are far more secure than e-mail communications, and they protect client confidentiality.

As an information-intensive industry with complex business processes involving many organizations across the world, insurance is well suited to use ASPs in meeting business challenges pertaining to claims litigation management. Technology should support timely, proactive and ongoing communication between insurer and outside counsel.

With a commitment to a collaborative effort between law firm and carrier, technology can be employed to support the process. A collaborative process is a natural fit for the benefits of Internet-based ASP tools, providing instant, anywhere, anytime communication to all involved. With functionality from claims setup to task management, to billing submission and review, todays technology provides the insurance industry with the opportunity for an end-to-end collaborative litigation management process.

In fact, traditional infrastructure combined with traditional software installation and maintenance have made effective litigation management very difficult to achieve.

Even with the best intentions at the outset of litigation, substantive issues such as budget approval or overall case strategies are often ignored, leaving a fertile source of conflict for counsel and the insurer. Use of phone, fax, mail and e-mail communications alone create large gaps of time and information between discussions on important issues. With several hundred claims files in the typical adjusters workload, managing the high volume of litigation is often done with less than effective communication and collaboration.

Real-time, instant communication capabilities and “anytime, anywhere” access offered through the ASP software delivery model dramatically improve communication by finally enabling attorneys and claims personnel to simultaneously view up-to-date information from their desktops with nothing more than Internet access and a Web-browser.

Good ASP solutions support claims personnel by providing the foundation for a collaborative, proactive work environment while continuing to provide the process functionality required to share information, prepare documents, manage calendars, and review case developments and progress in real time. Estimates on exposure, chances of success, and settlement objectives are all open for continuing review and comment.

Meanwhile, both claims personnel and attorneys can post comments, request additional information and offer suggestions for strategy. Through this collaborative process where information is quickly and easily shared, all parties ensure that quality standards are established up front and maintained throughout litigation. Well-chosen ASP applications not only provide accountability, but also enable claims personnel to remain informed and involved in litigation matters.

One problem is that while insurance industry executives support up-front budgeting and strategy development for claims litigation, the reality is that the effort typically falls by the wayside due to the inability to track and manage the litigation process once it is underway. As a result, there is little analysis of where time and dollars are actually spent in the litigation.

Although insurers have turned to outside fee auditors to gain some measure of control, this strategy has severely damaged the professional working relationship between insurer and outside counsel, while delivering little improvement in either communication or the quality of outcomes.

Effective cost control requires a detailed understanding of the investment of litigation time and dollars. ASP support of collaborative strategies that encourage insurers and lawyers to devise a “game plan” for each case help the litigation team determine legal tasks required for an individual claim and anticipate a time frame and budget for completion. By tracking bill-to-budget and litigation outcomes, insurers have the ability to analyze law firm performance and can make decisions on hiring the most efficient firms providing the best indemnity results.

The bottom line is that ASPs not only provide an easy and cost effective method to take advantage of the potential for technology, but the underlying Internet medium supports the collaborative process and instant communications missing in traditional software solutions.

Implementing ASP capabilities is a relatively simple matter. However, planning for strategic outsourcing requires selecting an ASP that fits well within the insurers business requirements and culture while delivering the functionality, availability, and service levels required.

Once the decision has been made to implement an ASP, insurers need to choose a partner with the experience and resources best suited to their businesses. Can the ASP provide 24/7 service and support? Does the ASP offer comprehensive training for insurer personnel and outside attorneys?

An IT service provider isnt just another supplier; its a virtual partner that lends specific technology and process expertise. It also frees up insurer resources so that the carrier can focus on the business of insurance rather than information technology.

By carefully choosing an ASP as part of a comprehensive business strategy, insurers can improve costs, increase competitiveness and maximize opportunities. However, ASP technology does not offer “plug and play” capability when it comes to improving claims litigation. Rather, it provides a tool to promote collaborative communication.

It is the commitment to collaborative relationships between insurers and their law firms that creates an approach to litigation management that holds the potential to improve business results. Supporting collaboration with an ASP can have a dramatic effect on a carriers profitability by streamlining communication tasks and creating cost savings in litigated claims.

Faiz Ahmed is chief executive officer and co-founder of Visibillity, Inc., based in Chicago. He can be reached at [email protected].

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, April 8, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.