Sarah Savory, Director of Premium Credit Control assesses the impact of the pandemic on credit control in the London Market.

The changing dynamics of the market following the pandemic and the hardening of rates has created a greater focus on premium collection. There is now far more emphasis on brokers to speed the movement of premiums from their clients to underwriters who are keen to collect premium quicker and improve payment performance. Payment performance monitoring helps underwriters to identify poor paying (re)insurers and work with brokers to address the situation. There is no doubt that premium credit control has gone up the priority list. Insurers want to understand bad debt, are assessing their exposure and are looking at their trading partners and how they are operating through the pandemic. The result is more focus and engagement on credit control professionals. Get in touch for more information. 

Premium credit control has often been seen as a backwater for many years, a division within a Company that does not add value. Many underwriters have accepted the view that they will be paid when the broker is paid – or pay when the last reinsurer on the risk has paid. Since the pandemic, the market has moved on and are challenging this view.

Data is key in successful timely credit control. From the initial contract set up, quality of data continues to hamper credit control. We have been helping underwriters and brokers for over 20 years and manage more than £10 Billion of EPI across 54% of Lloyd’s UMR’s. This enables us to readily identify where the flaws are in data quality, whether it be unsigned policies, incorrect settlement due dates or incorrect EPI’s. Through our work with clients, we know that presenting good and accurate data helps the broker in their reconciliation processes and ensures accurate management information and reporting.

Internal credit control can be cumbersome to operate and financially draining. The need for businesses to focus on ongoing and acquiring new business whilst letting a third party focus on the collection of the premium and the associated tasks has increased during the pandemic. Outsourcing the many tasks including rendering of statements, bank account reconciliation, cash allocation and written and paid bordereau production is an effective way to deliver on business plans. Utilising our extensive broker relationships and service values means that our skills can be utilised across all methods of placements and payment preferences. We already have relationships with many of the markets accounts teams, improving cashflow. Get in touch for more information. 

This consolidated approach has been working for many years and delivered tangible efficiencies for both brokers and underwriters. Our clients benefit from improved payment performance, compared across the market with 10% improvement in year-on-year aged debt and our on time settlements are 12% ahead of the market average.

Key takeaways:

– Premium credit control is becoming a higher priority with insurers
– Significant improvement in premium collection performance
– Enhanced data integrity through management of EPI’s
– Positive balance sheet impact from accelerated cash flow
– Measure payment performance by broker against their peers
– Meet with brokers to challenge working practices and internal issues that affect payment performance

For further information please contact our Premium Credit Control team here.