The Data You Need for Efficient Commissions Processing

How to Achieve Efficient Commissions Processing

It’s no secret in the industry that commissions processing can be a time-consuming, difficult task. But it’s also one of the most important parts of running your health and life insurance agency. 

To make commissions processing more efficient, you need two things. The first is an agency management system (AMS) that is designed to handle your agency’s needs, and the other is the topic of our blog today: the right data.

Today we’re going to discuss what the data you need actually looks like and how it affects the process as a whole. 

Essential Data for Commissions Processing

First, the data on your carrier commission statements has to be represented within your AMS. If you don’t have that data in your agency management system (AMS), then you cannot track it or process it. This will make commissions tracking inaccurate and your generated agent statements incomplete. 

When you receive a commissions statement from your carrier and prepare to upload it, ensure that every piece of data on it is represented within your AMS. This is especially important if you work with multiple carriers as the information on carrier commission statements can vary from carrier to carrier. 

Some of the key pieces of information on a carrier commission statement include:

• Agent name 
• Agency name
• Policy number
• Coverage type
• The split between the carrier and you

A solution like AgencyBloc's Commissions+ solution with a robust commissions processing tools relies on understanding the policy, understanding the coverage type, and understanding the split. 

It boils down to who you’re paying and how much you’re paying them. Without any of this information, you can’t track if it’s correct and you cannot produce agent statements that are reliable.

It is essential to have that statement data within your AMS to make tracking both complete and simplified. Without it, your processing will be affected, and you’ll also be forced to keep files of all your carrier statements to refer back to when you do quarterly and end of year analysis or when an agent has a question about their commissions.

For the matter of tracking missed or incorrect commission payments, one of the key pieces of data you must track in your AMS is Bill From Date. You have to combine that with the splits and payees you build out to best track when commission payments are coming in and how much they’re for. 

Commission splits are how a carrier commission payment is divided up to all parties. Maybe you have an FMO/IMO that takes a percentage or a senior agent that gets a portion. Maybe the house takes a flat rate. Determine those splits for carrier-specific commissions, then assign payees as normal. 

Then, the system will do the math from there working with the Bill From Date to determine when each payment should come in for which agent and how much that payment should be. 

It can also determine if what you receive is correct. Sometimes, the carriers can get behind or simply miss a payment, so having the backup of a system that is tracking expected payments is crucial to protecting your bottom line.

Without those specific pieces of data, commissions processing can be inaccurate, less efficient, and less effective. 

After you make sure you have your carrier commission statement data and your Bill From Date, the next step to take is to determine what you want to report on. Figure out:

• What are your KPIs for the commissions side of your business? 
• Which areas within commissions do you want to report on?
• What do you want that report to show?

Having the answers to those questions will help you determine what is most important for your insurance agency to track. Remember, if you don’t have data in your AMS, then you cannot track it and you cannot report on it.

Posted by Allison Babberl on Tuesday, February 11, 2020 in Process Commissions Efficiently

1. commissions
2. data management
3. productivity