ISO reacts to recent IRC study - full article

*ISO reacts to the recent IRC study comparing auto injury claims in four 
tort states that reveals dramatically different types of treatments and 
charges for auto injuries, fuelling the debate over the rising costs of 
BI claims*

*
“The technology to prevent spiraling auto insurance claims costs already 
exists,” comments Lee Fogle, Vice President, ISO. “This technology 
enables claims handlers to better understand injuries and the related 
medical costs as well as the expected levels of treatment for injuries.”*

*
*“Some US insurers are already independently setting their own 
benchmarks for BI claims, state by state, county by county and office by 
office,” says Lee Fogle. “Our insurance industry clients are already 
monitoring injury and treatment disparities in real time and determining 
their own benchmarks and protocols to control spiraling insurance costs 
and counteract the rise in medical fees. ISO Claims Outcome Advisor™ 
(COA) users do not have to rely on an Insurance Research Council (IRC) 
five-year analysis to get a picture of how claims vary state by state. 
They already know this because they can manage their claims data in real 
time.

“It is only by using advanced claims management technology such as COA 
to manage claims settlement information that insurance organizations can 
begin to address the dramatic rise of auto insurance claim costs in tort 
states.

“Adjusters are better equipped to consider reasonable and appropriate 
treatment, and time off of work,” Lee Fogle continued. “They know by 
state and by county what their best practice benchmarks are at the time 
a claim is made. This makes addressing the rising costs and disparities 
of bodily injury (BI) claims an ongoing and direct process, not a 
sporadic reaction to industry reports. Insurers using our COA historic 
injury database have set benchmarks and have identified significant 
savings in medical costs in BI claims.”

Lee Fogle’s comments follow a recent study by the IRC, which found that 
insurers’ bodily injury liability (BI) payments exceeded claimed 
expenses in tort states.

COA directly addresses rising medical costs. COA users track their own 
claims in real time, independently establish their own benchmarks and 
identify their own settlement* *norms state by state, county by county, 
adjuster by adjuster. According to Fogle: “our customers have the 
benefit of looking at an historic database of detailed injury and 
payment information in any jurisdiction in which they write business. 
The data mining tools ISO provides give our customers actionable/_ 
_/information to proactively manage their open claims while there is 
still time to affect the outcome.”

The IRC report entitled /Analysis of Auto Injury Insurance Claims in 
Four Tort States /found that from 1997 to 2002 average claimed medical 
expenses increased by 25 percent in California, 24 percent in Illinois, 
39 percent in Texas and 9 percent in Washington. Despite a comparatively 
small increase in average claimed medical expenses, Washington had the 
largest disparity between economic losses and average BI payments – 
$3,833 and $7,594 respectively – with BI payments reflecting the levels 
of the more expensive states – $7,830 in California and $7,850 in 
Illinois. The report also highlighted that auto insurance claimants tend 
to seek different types of medical treatment for similar types of 
injuries – more chiropractors are used in California, for example.

“The disparities in the tort states’ settlements show just how much the 
industry as a whole still has to gain by adopting new technology-based 
procedures,” continued Lee Fogle. “It is extremely difficult for 
insurers to assess the level of medical expenses being presented to them 
by claimants because ‘reasonable’ or ‘appropriate’ treatments are 
difficult to determine accurately without any benchmarks. Systems such 
as ISO COA in effect help level the playing field to ensure more 
consistent and efficient claims settlements. COA integrates a medical 
encyclopedia of injuries and their severity, as well as an historical 
claims management database, which enables insurers’ claims adjusters to 
have an in-depth understanding of injuries, medical costs, and 
settlement values. Adjusters can compare their data against the 
benchmarks and assess appropriate medical treatments and costs.”

Lee Fogle added: “The real time tracking and monitoring capability of a 
management information database like COA also helps claims adjusters to 
conduct more informed negotiations with lawyers based on actual and 
objective medical findings for injuries, treatments and pre-existing 
conditions. This is key to helping reduce overpayments before the money 
goes out the door.”

*About ISO Claims Outcome Advisor™ (COA™)*

ISO Claims Outcome Advisor™ (COA™) is the industry's first personal 
injury claims management solution that manages the multiple dimensions 
of organizations' personal injury claims portfolios. COA understands the 
severity and recovery implications of over 18,000 injuries, treatments, 
complications and preexisting conditions and 14,000 occupations and 
creates for an insurer an historic database of all of its injury claims. 
COA helps claims handlers, managers and actuaries manage the unique and 
complex medical, legal, and occupational issues presented by personal 
injury claims, and helps ensure appropriate financial arrangements are 
agreed to and implemented. Claims handlers can manage all aspects of a 
case from first notice of loss to return-to-work plans, rehabilitation 
and damages.


            About ISO

ISO is a leading provider of products and services that help measure, 
manage and reduce risk. ISO provides data, analytics and 
decision-support solutions to professionals in many fields, including 
insurance, finance, real estate, health services, government and human 
resources. Clients use ISO’s databases and services to classify and 
evaluate a variety of risks and detect potential fraud. In the US and 
around the world, ISO’s services help customers protect people, property 
and financial assets.


For more information please contact:

Dave Dasgupta, ISO
Tel: 201-469-2426
DDasgupta@iso.com 

	

Manuela Whittaker, IBA – PR for ISO
Tel: 0044 1780 721433
MWhittaker@iba-americas.com 

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