Use of Arbitration for Resolving Inter-Insurance Disputes Jumps Nearly 25 percent in 2002

February 12, 2003

The use of arbitration by property/casualty companies and self-insureds to resolve inter-company claims disputes surged nearly 25 percent in 2002, according to Arbitration Forums, Inc. (AF).

AF, a nonprofit provider of inter-insurance dispute resolution services, resolved nearly $1.8 billion in inter-company claims disputes in 2002, up 24.3 percent from 2001, according to D. Kay Smith, CEO of AF.

The number of arbitration filings in 2002 also grew, increasing to nearly 400,000, an 11.3 percent jump from 2001. An AF study found that for every dollar a company spends on inter-company arbitration, the return on investment in 2001 was $20.63, according to Smith.

“Insurance companies and self-insureds are saving an increasing number of expense dollars by choosing arbitration over litigation as the means of resolving property and casualty claims,” she said.

Smith noted that the increase in arbitration filings could be attributed, in part, to the ease of use of the Internet and e-mail to further speed the arbitration process. The new E-Speed Filing Program at AF offers high-speed electronic filing for small-dollar auto liability and damage disputes.

New web-based training programs also are helping a growing number of subrogation professionals become more aware of how to use arbitration effectively and enhance their recoveries, she observed.
“The heightened company focus on saving expense dollars coupled with the ease of electronic filing and an increased understanding of the benefits of arbitration programs should generate even more growth in the future,” Smith added.

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