Last year, we embarked on a mission to build modern, fast, and cost-efficient payment infrastructure for the insurance space. While we’re still moving forward with that ultimate vision, we uncovered a significant need among carriers and MGAs. This discovery has refocused our direction.
I’ll get to that insight and the direction it’s led us in just a moment, but first, a recap. For the delay, I’ll reward you with a nostalgic reminder of a perfect late ’90s rap tune.
Solving our own problem
Back in 2018, I founded an insurtech MGA and digital agency. While there are great but expensive solutions (cough, Stripe*, cough) to digitize payments and a wonderful group of policy administration systems to choose from, we quickly realized that solutions didn’t exist to automate most of our back-office financial processes. These workflows mainly involved sending commissions to agents, orchestrating funds to partners, returning premiums for cancellations, and adjusting premiums for mid-term changes. As we scaled, we realized these manual tasks would become increasingly time-consuming. This was when we first saw the opportunity to create a financial infrastructure that could plug into policy systems and automate this entire process.
As we brought on more third-party agents, we began to face another issue: managing their onboarding, ensuring compliance, and maintaining general communication (regarding compliance issues, commission incentives, and more) became increasingly difficult.
Mo’ Agents, Mo’ Digitization, Mo’ Problems
So, with our background in mind and a lot of customer conversations taking place, what was our big insight? We realized that the collection and movement of money within the insurance ecosystem touch many different silos within an organization due to the heavily regulated nature of insurance. These workflows cross several verticals in an insurance organization, most notably the sales/partnership team, the compliance team, and the back office fin-ops team.
Insurance has some of the most complex payment orchestration of any industry. Add in the fact that statutes and contracts impose fiduciary obligations on how funds move, how they are stored, and who can touch them, and you can start to see the problems that can arise. Yet we continue to use general-purpose payment rails that have no insights into compliance.
When third-party agents collect premiums, three internal teams at the carrier or MGA level are typically involved: the sales/partnership team, the compliance team, and the back office/fin-ops team. And because over 60% of property & casualty insurance in the U.S. is sold by third-party agents, often organizations have little insight into the compliance status of those agents.
The push for carriers and MGAs to build better underwriting and payment capabilities for agents, enabling them to sell policies nationally, compounds these problems. You may have an agency you onboarded two years ago with a lot of agent turnover, writing businesses, and collecting funds in new states without knowledge of the current licensing status of that agency or agent.
The Turris Solution
Late last year, we started developing a platform to streamline and combine three critical workflows: (i) agent onboarding, (ii) licensing verification every time a policy is sold, and (iii) commission payments. Our solution allows multiple teams within a carrier or MGA to manage these workflows seamlessly in one place, improving efficiency, communication, and compliance.
- The partnership team can onboard an agency fast and have them selling a policy in minutes and, at the same time, please the compliance team by ensuring all agents are correctly licensed.
- The compliance team can ensure agents remain 100% compliant and can respond to regulatory or partner audit requests with the push of a button.
- Fin-ops teams can have commission structures managed at the partnership level and know all commissions are sent out for the correct amount without any manual work.
This combined workflow improves the lives of internal teams and makes third-party agents happier. They have an easier way to onboard and interact with the carrier or MGA on compliance and commission issues. Additionally, upstream risk partners are happier because they can ensure compliance across their entire premium funds flow journey.
Agents are demanding (and deserve) better
In the not-so-distant future, carriers and MGAs will be judged by how well they interact and support their third-party agents to keep premium growth healthy and strong. We already see this playing out as agents gain more power by working together. It’s also evident that carriers/MGAs will continue to focus on ways to improve their operating margins.
We feel we’ve helped move these capabilities forward with our new platform, and we’re excited about the enhancements and further funds flow capabilities that will be bringing online soon.
Join us!
If you work at a carrier or MGA and want to streamline agent onboarding, ensure compliance across your agency sales force, and automate commission payments, reach out to us today! Contact us today for an exclusive demo and see how our platform can transform your operations.
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This is just step one in our vision of creating purpose-built finance and compliance infrastructure to handle all of the insurance back-office needs. If you’re an agent or agency owner, we have something coming soon for you as well!
*I dunk on Stripe, but there are plenty of payment players specific to insurance that charge WAY too much. I’ll withhold names to protect the guilty…for now.
