Ianika Tzankova, David J. Rosenberg, and William J. Perry Co-Author Article for Insurance Day
May 20, 2015 02:20 PM
Ianika Tzankova, David Rosenberg, and Bill Perry co-authored an article on subrogation for Insurance Day on April 23, 2015. The full length article from Insurance Day can be found here. Read below for more on this topic.
U.S. Markets Evolving Subrogation Strategy – Adding to the Bottom Line
During periods of weak financial markets insurance companies have discovered that subrogation can be a leading revenue stream.
Subrogation entitles the insurer to assume the rights of its insured when it has indemnified the insured; stepping into the insured’s shoes and seeking recovery from the responsible party. Although previously approached with caution by the insurance market, the image of subrogation is now changing, as insurers being to use it as way to add to the bottom line when other revenue streams are waning.
In the US, insurance companies have established large and sophisticated subrogation units. And trade groups – such as the National Association of Subrogation Professionals (NASP) – have been created which work together to recognise subrogation recoveries as a distinct industry. This enables information and resources to be shared and provides subrogation professionals and their clients with qualifications and certification.
Because of this, the US market is currently leading in subrogation matters, but the situation in Europe is changing. The Dutch insurance industry, for example, was for many years a victim of its “clubby culture” within which there were agreements between the members of the Dutch Association of Insurers (DAI) to not exercise subrogation rights towards each other, either at all or in a category of cases. But subrogation claims are now possible in a wider range of cases. In UK and Australian law, subrogated recoveries have been a feature for many years, and in Australia they are assisted by there being fewer statutory limitations on rights of subrogation.
In third Party Funding (TPF), the funder takes over the risk of the litigation and covers all costs related to the exercise of the subrogation rights as a nonrecourse funding facility offered by specialised providers. As the TPF in Europe and the UK grows, it is to be expected that the subrogation claims market in the region will continue to develop, with the UK and Europe soon catching up with the U.S.
Ianika Tzankova is general counsel and responsible for the Netherlands office of Bentham Europe; David Rosenberg is a partner and cochair of the insurance coverage practice group at Weber Gallagher; and Bill Perry is a partner at Carter Perry Bailey.