Major U.S. Utility Company Improves Claims Services and Ramps Up Subrogation Program

One of the largest U.S. power companies with more than $17 billion in annual revenues delivers electricity to approximately 5.4 million customers in two northeastern states. Each year, one of its primary subsidiaries manages more than 10,000 claims.

In addition to general liability claims such as food spoilage caused by power outages and auto accidents involving company vehicles, the company must recover millions of dollars in third-party claims related to damage to an estimated 90,000 miles of underground power lines.

Prior to selecting RISKMASTER® in 1998, the company used paper files and a homegrown system developed for basic reporting and projection purposes. The paper-based environment made it difficult to share information with appropriate parties within and outside the organization, to locate historical information for legal purposes and to respond to customers in a timely manner.

Adding New Capability, Increasing Flexibility

Acknowledging these limitations, the company’s management sought a claims and risk management system robust enough to handle detailed reporting and meet the needs of multiple stakeholders. The team selected RISKMASTER.

“What I like most about RISKMASTER is the flexibility,” said the utility’s subrogation manager. “It not only enables us to maintain and share data much more effectively, it allows us to slice and dice exactly the way we need it. The Business Analytics function makes this possible within the system — no need to run the report and then dump the information into Excel.”

All paperwork is scanned and searchable in RISKMASTER. The company has reduced its file space requirements and virtually eliminated issues associated with lost or misfiled documents. In addition, the Web-based version helps new users get on the system faster and with less training.

Elevating Customer Satisfaction

Following deregulation, customer service became increasingly important. Prior to implementing RISKMASTER, if a customer filed a claim and called for status, the company would need to locate the paper file. It was difficult to provide an immediate answer, especially if the paperwork had been forwarded to a third-party administrator.

“With RISKMASTER, we can provide customers with information they’re looking for right away,” said the subrogation manager. “It’s no longer a matter of customers saying, ‘Well, I filed a claim and they still can’t tell me what’s going on with it a week or two later.’ RISKMASTER has helped greatly with customer satisfaction.”

The flat file reports RISKMASTER produces each evening help the company anticipate increases in claims activity and respond faster. For example, data from yesterday’s storm helps identify problem areas for resolution and gives the company information about the number of new claims to expect.

RISKMASTER also makes it easy to communicate with residents in the event of a mass outage. “I don’t know what I’d do without the mail merge feature,” the manager continued. “Our first task is to acknowledge every claim that comes through the door. When the communication is the same, we draft one letter. RISKMASTER does the rest.”

Improving Subrogation Outcomes

Of the various subrogation claims the company pursues, many involve protracted legal disputes — especially when multiple contractors are working on a construction job and one of them severs an underground line.

“It’s not always a cut-and-dried situation in which you hit our equipment and we’re billing you,” said the subrogation manager. “There are often issues in which various circumstances come into play and we’re told ‘I’m not liable.’ RISKMASTER enables us to store notes and photos to the file. Everything is there when we need it — especially if we don’t go to trial for several years. We’re not stuck chasing down information. It helps us make our case stronger.”

This benefit has been proven. “Before we had RISKMASTER, a high point in subrogation was around $1 million. However, in two years we jumped to two, then three and four. For the past few years, we’ve been at the $6 million mark. When we started using the system, $5 million was the most any company had ever achieved in positive subrogation outcomes,” he added.

Today, more than 10 years after adopting the software, he has nothing but praise: “We started with the desktop version and moved to the Web-based version, RISKMASTER X. I can’t say enough how we’re pleased with the progression of the product over the years. It hasn’t stopped evolving, and CSC is always working to make it better. CSC listens to customers and that support is great.”

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