Cost

ClearPay Cost Analysis:

The issuance of cheques creates a cost and labour burden for Brokers and Carriers alike. Converting to electronic payments is essential. There are many multi-step inefficiencies that are inherent in the current receiving and processing of payments by the Broker to the Insurer.  Often the hard and soft costs associated with cheques are not recognized.  Judge for yourself, compare ClearPay to your current process and costs.


Current Cheque Based Process:

  • Query broker payment status
  • Receive cheques
  • Sort and distribute cheques
  • Enter cheque details
  • Receive reconciliation data (various formats)
  • Enter reconciliation data
  • Store cheques
  • Physically deposit cheques at bank
  • Accounting reconciliation (month end)

ClearPay™ Process:

  • Receive ClearPay™ payment notification with reconciliation data
  • Enter payment details
  • Enter reconciliation data
  • Accounting reconciliation (month end)

 

 Cost Comparison:

 

Current State

  • Receive payments in multiple forms (cheques, electronically, bank draft, wires) and different handling practices
  • Late payment of premiums by brokerage “the cheque is in the mail”
  • Premium data for reconciliation received in multiple forms (paper, emailed) if received at all
  • Charged for each cheque deposited to account by the bank, typically $1.10 for each cheque
  • Receive multiple cheques from same brokerage but based on broker number
  • No involvement by IT to receive funds
  • High communication between carrier and brokerage re payments – “Where is the cheque?”, “What is this electronic credit for?”, “Where is payment for NSF direct bill?” etc.
  • Multiple trips to bank for cheque deposits
  • No consistent and economical way for brokerages to pay one time items where funds need to be received by the carrier under a tight timeline (i.e. For direct bill NSFs, cases where insured pays direct bill to brokerage, mid term policy change etc.)

ClearPay State

  • Receive funds into account electronically with one handling practice
  • Premiums are credited to carriers account when due. Potential to decrease average account receivable period and increase treasury balances.
  • Receive premium policy data in preferred electronic format with each payment. Eases reconciliation process and first step towards automatic reconciliation
  • ClearPay combines electronic deposits from all brokerages into a maximum of one deposit per day. Your bank will typically have a charge for each file of batched deposits (maximum of one per day) plus a maximum of $0.20 per deposit from a brokerage.
  • No involvement by IT to receive funds
  • Funds and related data are communicated at point of approval by brokerage (funds are locked down)
  • No trips to bank for deposits
  • Funds can be deposited no later than 48 hours after brokerage authorization.

Current Carrier Costs:

 

Hard Costs:

  • Lock Box Fee’s/Third Party Processing fee’s
  • EFT transaction fee
  • Cheque deposit fee

Soft Costs:

  • Handling Costs – receipt, storage, bank deposit, lost cheques and delayed receipt of funds
  • Key-in payment info into the system (data entry)
  • Communication inefficiencies – time to advise Underwriting if necessary
  • Handling of multiple versions/formats/timing of reconciliation data
  • “Chasing down” policy/reconciliation data from brokers
  • Unnecessary policy cancellations
  • Fraudulent cheque inconvenience (time and energy and cost of receiving payment late)