RAPID X: A Technology-Based Solution That Enables Early FNOL

The answer lies in harnessing technology to detect injury exposures earlier in the claims process. RAPID X, RiskStream Collaborative’s auto claims data-exchange solution, enables secure, permissioned data-sharing among insurers, allowing them to identify and respond to injury-related claims more quickly.

RAPID X is a decentralized, carrier-to-carrier auto claims data-exchange solution that allows insurers to share key claims information immediately after a loss is reported. Its value lies in accelerating first notice of loss (FNOL), allowing for early identification of injury claims, particularly when a claim is reported to only one of the involved carriers.

With RAPID X, insurers can:

• Expedite time to FNOL, allowing for early intervention on injury claims

• Reduce FNOL intake and reporting time

• Shorten claim cycle time

• Reduce third-party data vendor cost

By empowering insurers with timely claim insights, RAPID X supports faster, more efficient claim resolution.

Proactively Addressing Customer Needs

Legal representation is not inherently negative, but early, unnecessary representation often leads to protracted disputes and elevated costs. Technology like RAPID X gives insurers the tools to act during the narrow window before legal escalation begins.

This window—often just the first few days after an auto accident—is when proactive claims management, human engagement, and streamlined resolution are still possible. RAPID X gives insurers a way to preserve that opportunity through fast, secure data exchange.

Call to Action

Auto insurers can no longer afford to remain reactive in the face of accelerating legal-system abuse and social inflation. By investing in early intervention technologies like RAPID X, the industry can reduce costs, improve the claimant experience, and reestablish control over the trajectory of auto injury claims.

The choice is clear: embrace technology and innovative claims handling solutions, or pay the price later.

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Sources

• “Sedgwick: Attorneys Involved in Claims Sooner and More Often,” Claims Journal, April 13, 2022, https://www.claimsjournal.com/news/national/2022/04/13/309856.htm.

• Mubbin Rabbani, “Attorney Involvement Keeps Claims Soaring,” Insurance Thought Leadership, June 26, 2023, https://www.insurancethoughtleadership.com/claims/attorney-involvement-keeps-claims-soaring.

• Stephen Applebaum and Alan Demers, “Social Inflation: Decades of Insurance Litigation Abuse,” Insurance Thought Leadership, July 17, 2024, https://www.insurancethoughtleadership.com/claims/social-inflation-decades-insurance-litigation-abuse.

The auto insurance industry is facing growing challenges, including rising litigation rates, increasing attorney involvement, and mounting claims costs. Insurers are experiencing longer claim cycles, less control over outcomes, and rapidly increasing legal expenses.

A key driver of this trend is how quickly attorneys are becoming involved in auto claims. In many cases, representation begins before the claim is even filed, leaving insurers little opportunity to streamline resolution of the claim by connecting with the customer directly.

Technology offers a promising path forward. Solutions that enable early identification of potential injury claims—before attorney involvement—can help insurers intervene proactively. One such innovation is RAPID X, The Institutes RiskStream Collaborative’s auto claims data-exchange solution, which allows insurers to securely share claims data and receive early notification of injury exposures. This kind of preliminary collaboration represents a strategic shift in how insurers can manage escalating injury exposure and respond more proactively to customer needs after an auto accident.

Attorney Involvement Is Rising

Attorney involvement in auto claims is becoming more common, and it's happening sooner than ever. For example:

• A Sedgwick analysis found that in litigated commercial auto claims, 55% had attorney involvement on or before the first day of reporting—up from 43% just four years earlier. Furthermore, 67% had legal representation within the first 14 days.

• A LexisNexis Risk Solutions survey found that 85% of auto-accident claimants were contacted by attorneys after a collision, and 57% hired representation before even filing a claim.

These early legal touchpoints not only complicate claims resolution, but also they limit the insurer’s ability to engage with the claimant, investigate effectively, and offer a timely settlement.

The Hidden Toll: Lost Time and Money

Attorney representation in auto claims doesn’t just increase legal friction, it also dramatically extends claim timelines and inflates costs.

• According to a Milliman/APCIA study, auto claims with legal counsel took an average of 750 days to resolve, compared to just 195 days for unrepresented claims.

• The same study found that attorney-represented claims resulted in a 14-times-higher average loss cost and a 34-times-higher total cost, including legal expenses. Also, although they represented only 30% of claims, they accounted for 87% of total costs.

This cost disparity represents an unsustainable trend for the auto insurance sector and demands a shift toward earlier and smarter claims handling.