Three numbers that should agree
At month end your finance team has three figures. The premium your payment provider says you collected, less refunds. The premium your policy administration system says was written, adjusted and cancelled. And the premium, net of commission, that you owe each capacity provider under your agreements.
They never quite agree. A customer paid for a policy that was then cancelled in cooling-off, and the refund went out a day into the next month. A mid-term adjustment was processed but the extra premium failed to collect. A monthly customer's instalment was taken twice after a card update. A broker paid a batch of premiums in one transfer. Someone works through the differences in a spreadsheet, and some are carried forward because nobody can explain them.
Where the differences come from
Premium moves through several systems, and each records it at a different moment.
| Cause | What it looks like | Where it starts |
|---|---|---|
| Timing | Payment in one month, policy transaction in another | Different cut-offs across systems |
| Failed collections | Policy shows premium, no cash arrived | Instalment or adjustment payment failed |
| Refunds not linked | Cash out with no matching cancellation | Refund made in the payment provider by hand |
| Broker or partner remittances | One payment covering many policies | Remittance advice separate from payment |
| Duplicate collections | Two payments for one instalment | Retry after a card update |
What is owed to capacity providers and when is set by your agreements. We calculate it from reconciled data so it is right.
Why unexplained differences matter
If the premium due to a capacity provider is calculated from policy data and the cash does not match, you may pay across money you never received, or hold money you should have passed on. Either is an uncomfortable conversation. Carried-forward differences grow into a problem at year end or audit. Finance spends days each month on a task that follows rules.
A three-way premium reconciliation
What we build matches cash to policy transactions every day, and derives what is owed from the result.
- Payments and refunds are loaded daily from your payment provider, such as Stripe or GoCardless, and bank statements for broker and partner remittances.
- Policy transactions are loaded from your policy administration system: new business, adjustments, cancellations and instalments due.
- Each payment is matched to its policy transaction by reference, then by customer, amount and date.
- Broker and partner remittances are split across policies using their remittance advice, read from the file or email.
- Timing items are carried and cleared when their pair arrives. Failed collections and unlinked refunds are flagged.
- The amount due to each capacity provider is calculated from reconciled transactions, using your agreed terms.
- Finance see a break list each morning, with the evidence from both sides, and record how each is resolved.
The same reconciled data can feed your premium bordereaux, so what you report and what you pay come from one place.
Month end, reconciled already
Most payments are matched as they arrive. Finance clears a short break list each day. At month end, the three figures agree, or the differences are listed with reasons. The payment to each capacity provider is calculated, reviewed and made with confidence, and a query about any policy's premium can be answered from its matched transactions.
Broker remittances stop being a month-end puzzle. A single transfer covering many policies is split using the broker's own remittance advice, and anything the advice does not explain is flagged for a quick call rather than left in a suspense line.
Does this sound like your premium accounting?
- Collected premium and written premium never quite agree.
- Differences are carried forward without explanation.
- Refunds are made in the payment provider by hand.
- Broker remittances are matched to policies manually.
- The amount due to capacity providers is calculated from policy data alone.