Case Study: Fortune 500 Commercial Insurance Company achieves 24.8% ALAE reduction with Bodhala Analytics

How a Fortune 500 commercial insurance carrier decreased their ALAE by 24.8% using Bodhala Analytics to optimize claims allocation staff or panel counsel

Fortune 500 Commercial Insurance Company faced a common but costly question: who is the right lawyer for each claim — in-house staff counsel or outside panel firms? Believing staff counsel were the most efficient, the carrier had been allocating about 20% of claims internally, but the Head of Claims Litigation suspected better allocation could reduce allocated loss adjustment expenses (ALAE). To test and improve that allocation they engaged Bodhala and its Bodhala Analytics solution.

Using Bodhala Analytics, the carrier required staff counsel to submit time and task activities on par with panel counsel, enabling true apples-to-apples comparisons across claim phases, UTBMS task codes, geography and cause of loss. Bodhala’s analysis produced a new hourly rate baseline that accounted for non-billable work and identified top performers, allowing optimized allocation between staff and panel counsel and driving a 24.8% reduction in ALAE.