Third party recovery

The IRSA agreement, successor to the 1968 IDA agreement, settles recoveries between French motor insurers on a flat rate basis. Each company pays its own policyholder directly, then recovers from the other side's insurer on a scale keyed to a typed collision scenario. Hundreds of thousands of disputes a year have left the courts that way, at the price of an accepted gap between the flat rate and the real cost of each file. Recovery is the action by which an insurer, once its policyholder is paid, turns against the responsible third party to get back what it disbursed. In law it rests on subrogation, which hands the policyholder's rights to the insurer. In practice it is a trade of its own, with its own teams, deadlines and profitability. In some lines the recovery rate swings the technical result by several points, and a recovery unit that underperforms shows in net claims cost long before it shows in gross experience. The same obstacles keep coming back: finding the responsible party, knowing whether they are solvent or insured, and limitation, which often runs from a fact the insurer learned of only late.