Inefficient back-office processes and labor-intensive accounting processes are causing brokers and agents to lose critical revenue. One insurtech is on a mission to plug those leaks.
Comulate, a San Francisco-based software provider, launched a revenue automation and intelligence software for large insurance brokers and agencies earlier this year.
The platform automates time-consuming direct bill processes, eliminating manual work performed by broker accounting teams by up to 90%, Comulate said.
The software, which integrates with major AMS, CRM, and ERP systems, automatically identifies missing commissions, tracks variance, and provides real-time forecasting to promote “revenue integrity.”
Jordan Katz, Comulate co-founder and CEO, said that the software is intended to respond to broker and agent leaders’ revenue challenges.
“Firm leaders repeatedly said they couldn’t accurately forecast or track variance. Meanwhile, producers often said they lacked visibility to understand how and for what they’re being paid, reducing trust, and distracting them from selling and driving top-line growth,” he said.
“On many levels, these revenue challenges spider-crack throughout an agency, requiring production and service teams to participate in the revenue process.”
Reflecting on the direction taken by insurtech companies in recent years, Katz revealed why he wanted to focus on empowering brokers and agencies through software.
“The ‘Insurtech 1.0’ phase tackled the distribution phase,” he said, referring to the wave of insurtech companies that focused on innovation in the direct-to-consumer space, which had a particularly strong impact on personal lines.
“The mantra seemed to be, ‘Why don't we just cut out these intermediaries, vertically integrate, and make the insurance process more efficient?’ But it turns out, 10 to 15 years into that experiment, that doesn’t really work. Brokers and agencies are stronger than ever,” Katz continued.
With the core distribution model for insurance intact, the CEO said that the opportunities for insurtechs lie in creating efficiencies and better infrastructure for intermediaries.
“For one cyber policy, for example, the MGA, the wholesaler, the retail brokers, the producers are all transacting back and forth in PDFs, spreadsheets, and pen and paper. So, that one policy will get folded down and that premium will pass between several firms,” he explained.
AI (artificial intelligence) automation and software can help the various intermediaries efficiently calculate what each firm owes the other, track down any missing premium, and ensure full accounts receivable, Katz said.
“These players can work and operate in much more effective ways, and we can eliminate a lot of the manual tedious work,” he added.
The importance of efficient back-office systems is also further emphasized by widespread broker consolidation. As brokers merge with or acquire other firms, automation will be key to consolidating data.
“It's hard to take several acquisitions and consolidate the back-office, or to have revenue coming in from a carrier, but the policy data lives in multiple different AMS and CRM systems,” Katz pointed out.
According to Katz, the Comulate team spent time learning about the inefficiencies that lead to missing commissions and labor-intensive accounting processes with initial clients in the insurance industry.
“Coming in as somewhat of an outsider really allowed us to learn and soak in the pain that these companies were experiencing,” he said. “Our strong software product and engineering backgrounds also allowed us to develop solutions that helped them level up what they could do.
“We were beginning to be able to answer questions that people have thought about for decades. Being able to deliver insights into those issues was powerful. We got a lot of energy off that and it became very clear early on that we wanted to work with this segment.”
Moving forward, Comulate wants to leverage its status as a young and nimble start-up to continue to iterate its platform.
“The brokers’ back office hasn't seen much innovation and is often relegated to tedious pen and paper workflows,” said Katz, adding that Comulate aimed to be a “modern, curious, and iterative partner” for its clients.
“We want to focus our future investments and iteration on building tools that further enable the automation at different levels of scale for those firms,” he said.
Have any thoughts about Comulate and the back-office challenges brokers face? Let us know below.