Excess Defense and Containment Costs from Inefficient Negotiations

Across syndicates, 10-15% leakage from inefficiencies in negotiation and authorization on large or complex claims can equate to tens of millions in additional defense, advisory, and settlement costs annually. • Defense and containment costs escalate through extended disputes, external advisory fees, and delayed or suboptimal settlements, adding a material layer of leakage on disputed fraudulent claims in reinsurance portfolios. • Excess defense and containment costs from inefficient negotiations, including extended case management, external review fees, and internal overtime, can create 10-15% leakage on these contested or high-cost claims, representing tens of millions of dollars annually for a large health carrier.

Actuarial pulls ad hoc extracts from policy/claims systems and data warehouses, rebuilds exposure and loss triangles in Excel, emails static analyses and rate models to claims managers, and relies on personal judgement and historic emails to benchmark what a given type of claim should settle for. • Adjusters and medical reviewers export claim data from core claims systems into spreadsheets, share proposed settlement ranges and medical rationales via email threads and PDF attachments, track negotiation history and offers in personal Excel logs, and coordinate approvals and authority over phone calls and ad-hoc messaging outside the core platform. • Field investigators send narrative reports and attachments via email or PDF, maintain personal spreadsheets of open cases, and rely on phone calls and texts with adjusters to clarify crucial facts in the run‑up to settlement conferences.