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ACORD STREAMLINES PREMIUM ACCOUNTING

ACORD STREAMLINES PREMIUM ACCOUNTING

ACORD STREAMLINES PREMIUM ACCOUNTING
February 02
07:29 2021

A new platform flags discrepancies and omissions in premium accounting. Over time, it will capture and share data on a range of policy transactions, including submissions, placements, certificates, claims notifications, and claim settlements.

ACORD STREAMLINES PREMIUM ACCOUNTING

… and uses blockchain to do it, by the way

By Joseph S. Harrington

Do you ever find premium reconciliation to be a hassle? ACORD, the organization working to promote data-sharing among insurance organizations, has come out with a new initiative to relieve this headache.

Developed in conjunction with Aon and Zurich, ACORD Solutions Group’s new “ADEPT” platform (for “ACORD Data Exchange Platform & Translator”) is currently designed to flag discrepancies and omissions in premium accounting. Over time, ADEPT will be expanded to capture and share data on the full range of policy transactions, including submissions, placements, certificates, claims notifications, and claim settlements.

Over time, ADEPT will be expanded to capture and share data on the full range of policy transactions, including submissions, placements, certificates, claims notifications, and claim settlements.”

Agents and brokers seeking to learn more can ask to view a 20-minute video description and demonstration of ADEPT by Ken Tashiro, vice president for corporate development at ACORD.

Unmentioned

Viewers will hear a lot from Tashiro in his presentation, but there’s one term they won’t hear, not once: blockchain. That may seem odd, because ADEPT is built on blockchain technology, and insurance professionals are accustomed to hearing bold promotions of blockchain initiatives.

Yet, except for passing references to “distributed ledger” (mentioned once) and “node” (mentioned twice), one would not know from Tashiro’s presentation that ADEPT is a blockchain-based application. Now, being based on blockchain doesn’t make ADEPT good or bad, useful or not. Tashiro’s presentation focuses entirely on its role in managing transactions that producers and carriers can identify firsthand.

As Tashiro explains, accounting for and reconciling premium payments is a fragmented, error-prone process that can result in producers sending invoices before coverage is bound, or having discrepancies between what the producer has billed and what the carrier has bound.

At best, such errors have to be manually tracked down and corrected through email exchanges. At worst, they remain undetected and poised to complicate a claim or renewal.

Using ADEPT, producers will immediately see records of all binders, policies, and invoices issued to a client as they are issued by the carrier, as well as records of premium payments by the insured, plus notes and documents added by any authorized user. Loss data is not currently captured but will be added. The system automatically flags gaps in documentation and discrepancies in corresponding records so they can be rectified quickly.

“The benefits of real-time reconciliation become more and more apparent the more written premium grows,” says Malou August, ACORD’s senior vice president for standards and membership. “By increasing the speed and accuracy of premium reconciliation, agents and brokers can improve their flexibility, competitiveness, and potential to grow.

“Simply put: who doesn’t want to get paid faster?”

Simply put, it’s about the solution (faster, more accurate payments), not about the tool (blockchain).

The author

Joseph S. Harrington, CPCU, is an independent business writer specializing in property and casualty insurance coverages and operations. For 21 years, Joe was the communications director for the American Association of Insurance Services (AAIS), a P-C advisory organization. Prior to that, Joe worked in journalism and as a reporter and editor in financial services.

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