Premium management outsourcing offers numerous benefits to client-agencies. Some are financially quantifiable, others can be easily recognized to increase the back office productivity or improve the agency’s overall financial position.
Payroll cost savings are generated by a reduction of CSRs and accountants’ workload. Additional interest earnings are associated with the additional float resulting from the reduction of receivables turnover average ratio from 12 to 1. Additional cost reduction due to the elimination of bad debts is the result of total elimination of earned premium liability during the premium collection process.
Not directly quantifiable benefits:
The additional profit potential of premium management outsourcing is estimated on the spreadsheet below. The spreadsheet may be downloaded and used by potential clients to estimate the additional profits their agencies should expect as a result of outsourcing the premium management.
Click on the spreadsheet to download it.