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Brokerages: Looking for Operational Inefficiencies? You Might Want to Check Your Billing System

Dated technology is costing brokers time and money. A holistic, automated billing solution could help.
By: | October 30, 2023

It’s no secret that the insurance industry can be a laggard when it comes to adopting new digital tools. Risk managers, carriers and brokers assess risk all day; it’s natural for them to shy away from some of the newer, more disruptive technology.

But even the most cautious industry professional might be surprised at the age of some of the “technologies” agencies are still using in their day-to-day operations. Christopher Peabody, head of strategic partnerships at Ascend, has walked into brokerages and seen check printing machines — yes, like a slightly updated version of the one Thomas Edison invented — sitting on desks.

“There’s been an acceptance of ‘This is how it’s always been done, and so we’re just going to keep on keeping on,’” Peabody said. “There are agencies that are still operating out of spreadsheets and file cabinets.”

Such dated technologies are causing all kinds of operational inefficiencies for brokerages. That check printing machine? It took the agency months to find the materials needed to file it. Paper checks from insureds cause headaches for brokers, costing both time and resources.

Making matters even more frustrating is the fact that most technologies tend to focus on just one aspect of the billing process. Some might add the ability to process credit card transactions. Others may have premium financing options. Few treat the process by which brokers collect payments from insureds and distribute them to carriers as a holistic system.

In today’s technology-driven world, brokerages need to assess their billing process and cut out operational inefficiencies caused by dated tools. Modernization can help brokers spend less time on mundane tasks and more time working with clients to find the insurance solutions they need, saving money and generating more revenue for their companies in the process.

Cut Down On Legacy Inefficiencies

Christopher Peabody, Head of Strategic Partnerships, Ascend

As CFOs and other members of leadership teams look for ways to grow their revenue, updating legacy billing systems is a logical place to start. Brokers, of course, need to manage client preferences. But if insureds prefer to deal in cash or paper checks, it might be worth it for brokers to try to convert them to safer, digital payment methods that allow for more automation as well as consumer protection within the billing process. Check theft crimes are so prevalent that mail officials don’t want Americans to mail checks.

“I think you’re going to start to see agency leaders take a firmer stance of understanding, ‘What is it costing my business to operate the way that I have? Are there ways to automate processes that can better protect my customers and free up my team’s time so that we can focus more on revenue-generating activities?’” Peabody said.

Automated billing systems can be a major time-saver. These tools can manage premium collection, commission distribution and payments to carriers. They offer an end-to-end view of the process, so brokers, insureds and carriers can see when a payment was issued and when it was processed.

“It offers full visibility in real time of questions like ‘When did the insured initiate their payment, and when did that payment clear? When will our commissions hit our operating account? When has the broker, the carrier been funded for what they’re owed net of the commission?’” Peabody said.

When these tasks are automated, brokers can focus on growing their books of business, rather than trying to attract and retain clients while managing the multitude of tedious tasks associated with billing.

“We can leverage technology to automate these processes and focus on growing our business as a result,” Peabody said. “People are consistently just blown away. They say how much value our product has provided to their business, freeing up time [so they’re] not having to spend 20, 30, 40 hours a month on these very mundane processes.”

Free Up Talent to Focus on Revenue-Generating Activity

Automatic billing systems encourage brokerages to measure success using the revenue-generated-per-employee metric in addition to annual premium growth. By evaluating their business based on how productive their employees are, brokerages can detect any inefficiencies that are preventing brokers from focusing on generating revenue, leading to financial gains in the long run. Over the next year, 63% of insurance businesses plan to increase their staff. They might not need to do that if they cut down on the work associated with dated billing systems.

When brokers can focus on revenue-generating activities, they tend to be more engaged and happier in their jobs, Peabody said. Many got into the business because they love working with clients and helping them find the insurance policies they need — not because they like manually dealing with billing.

“It’s hard to find talent in the insurance space today,” Peabody said. “No one wants to do these very mundane tasks of moving funds from one account to the next and then logging in to a system and releasing funds into someone else’s bank account.”

Some workers might even find that these monotonous operational tasks lead to burnout. When people don’t enjoy their work, it’s easier to feel overwhelmed by it. Automated billing systems can prevent that by allowing brokers to focus on the creative parts of their jobs.

“It helps them even just maintain better mental health because doing mundane things can be draining to some people.”

A Holistic Billing Solution

An end-to-end automated billing system offers numerous advantages to brokerages. Agencies that use Ascend’s automated billing solution can reduce the amount of time their brokers spend on billing, allowing the business to thrive by investing more time in revenue-generating activities.

“Our focus is to provide a more holistic solution that not only enables the agency to collect that one-time payment, if that’s how the insured chooses to pay, but also to provide the insured with the flexibility of being able to finance their premium at point of sale without the agency account manager, producer or whomever having to do additional legwork,” Peabody said.

Ascend’s comprehensive solution manages everything from payment processing to distributing commissions. Carriers, brokers and insureds can use the system to track payments, increasing visibility in the billing process.

“There’s a full line of sight from end to end for all the different stakeholders that are involved,” Peabody said.

Rather than use multiple tech platforms to process credit cards, accept payments in installments and distribute commissions, Ascend’s solution is all-in-one. Clients don’t have to worry about learning and managing several services. They can just log in to one platform.

“We’re a single solution that solves for multiple problems instead of the old way of having multiple solutions for those multiple problems,” Peabody said. “That’s been, as some folks say, a game changer for their business.”

To learn more, visit: https://www.useascend.com/.


This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Ascend. The editorial staff of Risk & Insurance had no role in its preparation.

Ascend is the industry-leading provider of financial operations automation software, dedicated to modernizing the insurance industry's financial infrastructure.

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