Brokerage Reconciliation
Often, insurers promise one commission but pay a different amount.
For most insurers, the Insurer Statement and the Broker’s Internal Tracker rarely match because of the following reasons:
- Process issues: For example, the sales team may not properly report all the policies they closed to the operations team. The operations team might miss entering details in the tracker or accidentally enter the same data twice.
- Training issues: Data entry personnel may not know how to correctly separate Own Damage and Basic Third Party in motor policies or distinguish Terrorism Premium in fire policies.
- Human errors: Duplicate data entries or incorrect values are entered in the tracker.
- Insurer mistakes: Insurers might incorrectly select the intermediary as direct, or select the wrong broker code; especially with offline policies.
- External factors: For example, a broker may lose a renewal, but the customer renews directly, resulting in the broker still receiving commission.
SIBRO helps brokers manage these challenges through a maker-checker arrangement, enabling brokers to streamline reconciliation and improve response times. Imagine a broker reaching out to an insurer within 2 days, rather than 20, after receiving the insurer’s statement. This level of efficiency is a key benefit of using SIBRO, making it the preferred choice for brokers across India.
Here’s how SIBRO supports this reconciliation process:
- STEP 1: At the end of each month, the Accounts team needs to estimate the expected commission from different insurers. They use the Uninvoiced Report, which is essentially a Pending Commission Report that provides a detailed view of pending commissions by month, insurer, and branch.
- STEP 2: Based on the Uninvoiced Report, the Accounts team can follow up with insurers to obtain the Insurer Statement. It’s common for the Insurer Statement figures to differ from the Uninvoiced Report figures. In such cases, agree with the Insurer Statement, raise an invoice, and secure the payment.
- STEP 3: The next step is Reconciliation. This involves uploading the Insurer Statement for each invoice. SIBRO will automatically compare the uploaded Insurer Statement with the operations team’s data, identifying missing policies, unpaid or partially paid policies, overpayments, etc., within seconds.
- STEP 4: The Accounts team’s responsibility is to identify discrepancies, not to correct them. The accounts team should inform the operations team about discrepancies, allowing the operations team to investigate the root cause. This investigation may uncover process issues, training gaps, or data errors that need permanent resolution. As corrections are made, the policies will automatically reconcile for the Accounts team.
- STEP 5: After resolving internal discrepancies, the remaining unreconciled data is likely due to insurer mistakes. Follow up with insurers to recover the outstanding commissions. Insurers may provide a revised statement, commit to paying the balance in the next cycle, or explain the discrepancy. If payment is promised in the next cycle, the software will automatically reconcile it when the next statement arrives. If not received, the policy will remain on the pending list for further follow-up.
Imagine a broker reaching out to an insurer within two days instead of twenty after receiving the insurer’s statement. This level of efficiency is a key benefit of using SIBRO, making it the preferred choice for brokers across India.
