Not Ready for Insurtech?
Here’s Proven Automation
You Can Use Now!
Digitizing your financial close and eliminating the
highlighters and spreadsheets can drive real
bottom-line savings that are hard to ignore.
Sure, insurtech sounds great – who
doesn’t want to modernize labor-intensive
and time-consuming insurance processes,
from underwriting and distribution to claims
and customer service? But the truth is, this
naturally risk -averse industry will adopt
changes only cautiously and strategically,
and very few new technologies have been
road-tested enough to demonstrate lasting
And of course, regulators will have a
significant say on what is permissible.
But while the trend unfolds, automation
has been proven to cut inefficiencies and
streamline workflows. The industry’s
administrative functions are undeniably
laden with overhead costs associated
with paper-based processes that demand
copious time, labor and materials.
Why not pick one essential process –
reconciliation – where automation can make
a significant impact on the bottom line and reduce the risk of compliance misses
“In the insurance industry, every fraction of a cent that can be saved in time,
resources, processing and operations goes directly to the bottom line,” said
Renata Sheyner, senior product manager of Frontier™ Reconciliation, the end-to-end reconciliation and certification solution offered by Fiserv.
“Additionally, the more data that insurers add to their business and analyze
through relatively untested insurtech innovations, the greater the need
for automated, reliable transaction-level operational and balance sheet
Why Automate Reconciliation?
Most companies currently reconcile their books with two tools — a highlighter
and a spreadsheet.
“I have seen conference rooms filled with filing cabinets to be sorted through,”
Sheyner said. “Sometimes I ask potential clients, ‘How many different colored
highlighters are in your desk drawer?’ Because that’s how it’s done without
automation – highlighting items on printed reports, or using Excel spreadsheets
Without automation, reconciliation at the transaction level can be a time- and
labor-intensive process that leaves more room for human error. And errors
increase the risk of running afoul of regulations. Reducing the risk of error in the
books can save companies thousands in non-compliance fines when it’s time for
“A lot of CFOs are now personally liable for misrepresentation of financial
statements. There are some pretty significant implications of non-compliance
and not having your books complete,” Sheyner said. “There’s a huge benefit in
incorporating all of your documentation into a system with built-in internal and
external audit controls.”
In an intensely regulated industry, the importance of accuracy and
transparency can’t be overstated.
Integration of data and matching transactions using an automated solution
can cut the risk of error by as much as 50 percent, while allowing a more holistic
and transparent view into the financial close process. An automated system with
built-in audit controls can also ensure that standards dictated by Dodd-Frank
and Sarbanes-Oxley Act are met.
A centralized view of transactions and the overall reconciliation lifecycle
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also makes it easier to mitigate the risks of fraud and write-offs related to
unexplained exceptions. End-to-end reconciliation automation, combined with
data agnosticism, identifies and resolves more exceptions. This can lead to an
overall 75 percent reduction in write-offs.
“Insurers need a data-agnostic tool that can pull in massive amounts of
disparate data around claims, policyholder details, equity fund balances,
payment and disbursement statuses and more, and funnel it through an
automated matching system to pair the right data with the right transaction,”
Frontier Reconciliation provides that very detailed transaction matching, and
can match data fields on a one-to-one, one-to-many, or many-to-many basis.
Transaction-level matching with multiple fields reduces the need for manual
intervention, “which allows employees to spend their time on value-added tasks
like managing or investigating exceptions,” Sheyner said.
Among Frontier Reconciliation users, reducing manual tasks and
implementing automated reconciliation can experience a 60 – 80 percent gain in
The cost savings are also hard to ignore. On average, financial companies
using an automated reconciliation solution save 25 percent on audits by
providing electronic access to accounts and required approvals.
Taking paper out of the equation also saves the costs of buying paper and
printing materials, reduces the manpower and hours needed to process records,
and can speed up financial close by two to four days, on average.
“We frequently help accounting and finance teams build a strong internal
business case for automated reconciliation and certification to present to senior
management,” Sheyner said.
In addition to mitigating risks from non-compliance, fraud, and write-offs, an
automated reconciliation process can also head off reputation risk.
“The reputational risk from restatement may not be monetary initially, but over
time can certainly hurt an organization pretty severely within the market among
their policyholders, peers and regulators,” Sheyner said.
Case in Point
Several large multi-line insurers in the U.S. rely on Frontier Reconciliation,
including a top 10 multi-line carrier with over $43 billion in direct premiums
written (DPW) who has trusted Frontier Reconciliation for the past 10 years.
“When they implemented Frontier Reconciliation a decade ago, they had a
team of 40 people working on 300 reconciliations a day using Excel worksheets.
Since automating the process, they’ve been able to refocus the team to eight
who now manage more than 3,000 reconciliations a day,” Sheyner said. “And
those other employees have been able to focus on other valuable strategic
Frontier Reconciliation also helps this leading Fortune 100 carrier match
policyholders with premium payment data —like what type of payment was
received, who received it and in what form (check, ACH, direct debit) — and track
other information like claims data, coverage and payout limits, and outstanding
“They can see in real time exactly how many outstanding payments there are
and how many disbursements have been made. They can check on aging claims,
which is important because the longer the claim sits open, typically the more
expensive it gets,” Sheyner said. “If something is outstanding for 30 days, they
can ensure processes are in place to bring those files to a close.”
Stronger compliance, reduced costs, and potentially faster claims closing …
these are the insurtech promises that an automated reconciliation solution can
bring to the industry today.
To learn more, visit: www.fiserv.com/frontierforinsurance.
Average improvement in
Reduction in write-offs
Lower auditing and
storage fees, cost of errors
and late closings related
to compliance issues
Reduction in errors that
result in financial loss
2– 4 Days
Faster time to close
(Estimate salary cost by percentages saved for each team to get the cost savings.)
Dramatically Improve Accuracy, Efficiency and Speed