Last month, we discussed how insurance carriers can navigate the premium process and manage many of the data integrity challenges associated with it. Now we are going to review why audit and compliance programs are demanding more support from billing and IT teams during premium reconciliation, creating a multitude of additional challenges for the IT department.
Premium reconciliation is critical for insurers. If it is not done properly, it can lead to billing and collections errors. Billing discrepancies are never in the insurers’ favor. It significantly impacts the bottom line when a customer is under-billed or not billed at all. Over-billing a customer may result in customer churn, high call center volumes, misstated financials, regulatory fines, embarrassing headlines and even litigation. For these reasons, it is imperative to understand the challenges that IT departments face and how to solve these challenges.
Customers now have multiple options to sign up for insurance, which may include through an agent, in person or through an online portal. This means auditors now require access to data from multiple systems and third-party sources. Therefore, the data needs to be collected, normalized and reported consistently in one or more general ledgers. As a result, auditors are putting added pressure on IT departments to ensure that all data feeding the general ledger is error-free and timely to guarantee accurate financial reporting. To mitigate this challenge, IT should have a single platform that allows them to ensure end-to-end data integrity for the premium payment process.
In addition, compliance reporting is becoming more frequent and detailed. Manual audits of billing data that involve validation of data sample sets are no longer effective in an environment where the volume, pace, and complexity of billing data has reached unmanageable proportions. Moreover, manual validation of information often detects errors too late. Error-laden data propagates to downstream systems, making cleanup expensive and time consuming. The pressure is on the IT department to upgrade core systems to enable features that help insurers provide a competitive edge, while processing data more efficiently.
Insurers need an end-to-end solution that can reach the source data as well as respective feeder systems, in real-time, no matter where it is and regardless of the format.
An enterprise data analysis platform can solve IT department challenges during complex premium work flows by providing automated, end-to-end reconciliation. With the ability to monitor large volumes of data across multiple disparate systems in real-time, the IT department will enable financial operations to have the ability to audit and visualize key premium information in their enterprise continuously. This relieves pressure on the IT department by equipping them with all the information so financial analysts and actuaries can settle premium payments and analyze financial outcomes accurately and on time. In addition, better end to end data integrity will, eliminate under- or over-billing that can result in customer churn, high call center volumes, misstated financials, regulatory fines, embarrassing headlines, and litigation.
The ideal platform should also independently validate 100 percent of all billing and collections transactions to detect and expedite error resolution in real-time before anomalies propagate to downstream systems that produce customer facing materials like bills, late or cancellation notices and other critical notifications. An end to end enterprise data analysis platform will also streamline audit and compliance efforts with comprehensive and verifiable execution reports and proof positive audit trails, to increase operational efficiency while reducing risk.
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