International. “This includes whether the
estimate reflects the loss severity accu-
rately and if we are settling the total loss
efficiently and fairly.”
As such, Rosenstein says there histori-
cally wasn’t a refined focus on other as-
pects of the workflow or other aspects of
the loss payout, such as:
EAre we getting fair salvage returns?
EAre we controlling our rental and towing costs through workflow?
“As claims organizations have become
more focused on efficiency and the insurance industry has become more competitive on the macro level, however, integration of salvage options has commanded
attention,” he says.
This is where technology solutions and
relationships with salvage vendors come
into play, Rosenstein explains.
“Over the past 8 or 10 years, there has
been a lot of consolidation where smaller
yards are bought by several large players,”
he says. “This lends itself to more of a
vendor management approach on claims
department side, where they are making
a more central decision as to which com-
pany to send salvage.”
As a result, insurers take into account
a variety of factors before selecting a vendor with whom to partner. Common criteria in selecting salvage vendors include:
E The breadth of the salvage company’s
geographic coverage area
E The strength of technology to bring
more buyers in and thus get better salvage
return for the insurer.
E Name brand recognition on the national level.
“Some insurers are bypassing salvage
yards for specific types of salvage to basically work with a targeted set of buyers to
bypass the middle man,” Rosenstein adds.
“Salvage yards charge fees for storage or
titling or just to conduct auction different
things. With lower value salvage, insurers
can actually be “upside down,” meaning
they end up owing money to salvage yard.
For instance, let’s imagine that a 1998
Toyota Camry gets totaled. Although its
market value could be $500 , the associated salvage fees could total $600. Companies such as Copart and IAA are aware
of this conundrum and are actually trying
to solve the problem.”
Technology At Work
“Generally speaking, if an insurer has
not fully considered the process and
workflow, then it will prove difficult to
optimize the claims handling,” Rosen-
stein continues. “There can be a one- or
two-day lag between declaring a total
loss and handing that off to whoever
coordinates salvage [at the company].
Without workload triggers, it is easy
to lose two to three days in the process
between totaling the car and getting it
assigned to the salvage yard. Our solu-
tion ensures that transactions don’t get
lost as they move from system “A” to
The “solution” Rosenstein refers to is
Mitchell’s WorkCenter system.
“One of our WorkCenter Solutions
is helping facilitate the workflow of the