If an insurer consistently pays out more than what it actually should owe, its bottom line takes a hit, so subrogation of claims losses has to figure prominently in the corporate earnings and loss landscape. In the fight for tools, resources and talent, though, subrogation has taken a back seat to other claims processes despite ranking among the top-three revenue sources for insurance carriers, following only premiums and investment income.

Benchmarking against others in the same sector of the industry helps insurers identify areas of weakness that need to be corrected and areas of strength that need to be protected.

Benchmarking is generally defined as the process of comparing a company's performance to that of other companies or organizations through the use of both objective and subjective criteria. Benchmarking should take place at the very beginning of any improvement cycle. If other companies are recovering a higher percentage of paid losses, benchmarking can highlight practices that can improve recovery.

There is nothing like honest fact-gathering and accurate comparisons to provide a baseline or reference point from which improvements can be made. When it comes to benchmarking, there are three general steps:

A quality process must be designed for gathering accurate facts and performing apples-to-apples comparisons. Getting the most out of benchmarking requires attention to detail and a clear understanding of what should be included in your comparison. No benchmarking efforts are effective if the data gathered have little to do with the processes at the target company.

Identifying the key performance indicators is essential to beneficial benchmarking since some processes are at the core of a company or department's overall performance and should be assessed critically, while others are just too trivial to worry about.