MGA premium collection

The MGA's biggest headache isn't underwriting. It's getting paid.

Ask any MGA ops manager what takes up most of their time and it won't be underwriting. It's premium collection, the messy, manual process of getting brokers to pay, matching their payments to the right policies, and settling to carriers on time. It is the insurance back-office challenge that nobody talks about at conferences but everyone deals with every day.

The premium flow

Understanding the MGA premium collection challenge starts with understanding the flow of money through the chain:

1. Policy binds: the MGA underwrites and binds a policy under their delegated authority
2. Premium requested: a premium amount is due from the broker, based on the policy terms
3. Broker chased: the MGA sends remittance advice and follows up when payment doesn't arrive
4. Payment received: the broker sends a bank transfer, usually covering multiple policies
5. Payment matched: the payment is allocated to the correct policies (the hard part)
6. Commission split: broker commission and sub-brokerage are deducted from the gross premium
7. Carrier settled: net premium (after commission, taxes, and MGA fees) is sent to the carrier

Each of these steps is typically manual. Each introduces delay, error, and friction. The entire chain, from bind to carrier settlement, can take months.

Why it's hard

Brokers batch payments

Brokers don't pay per policy. They accumulate premiums and send a single bank transfer covering many policies, sometimes from the same month, sometimes catching up on previous months. A single payment of $200,000 might cover 30 different policies across 4 different MGAs. Premium reconciliation becomes a puzzle.

References don't match

The bank transfer reference might say "March Premiums" or just the broker's company name. There's no policy number, no structured data, nothing to automatically tie the payment to the right policies. Insurance payment processing still relies on free-text bank descriptions.

Partial payments and multi-policy remittances

A broker sends $80,000. The policy says $100,000 is due. Is it a partial payment? Has the commission already been deducted? Or is the $80,000 covering a different policy entirely? Without a matching remittance advice, you're guessing.

Remittance advice: the missing link

Remittance advice is the document (or data) that tells the MGA what each payment covers. It lists the policies, the premium amounts, and any deductions. Broker remittance management is about generating these, sending them, tracking responses, and using them to allocate payments.

The problem is that remittance advice is often:

• A PDF attachment to an email, requiring manual extraction
• In a different format from every broker
• Sent days or weeks after the actual payment
• Sometimes not sent at all: "the payment's in the bank, can you figure it out?"

Automated remittance advice, generated from the shared ledger and tracking responses digitally, eliminates this bottleneck entirely.

Ageing and escalation

Once premium is outstanding, someone needs to track how long it's been overdue and escalate accordingly. Insurance premium tracking means knowing:

• Which premiums are 30 days overdue: send a reminder
• Which are 60 days overdue: escalate to the broker relationship manager
• Which are 90+ days overdue: consider cancellation or escalation to the carrier

Without premium collection software that tracks this automatically, someone is maintaining an ageing spreadsheet by hand. Credit control runs on memory and calendar reminders.

The downstream effect

Premium collection isn't just an admin problem. It blocks everything else:

• Bordereaux can't be generated until premium is confirmed as received and matched
• Carriers can't be settled until the MGA knows exactly what's been collected and what commission to deduct
• Exposure data is inaccurate if premium status doesn't reflect reality
• Cash flow forecasting is impossible without real-time outstanding balances

Commission: the other complexity

When premium is collected, commission must be calculated and deducted before settling to the carrier. This includes:

• Broker commission: the producing broker's percentage, agreed per policy or per binding authority
• Sub-brokerage: if a sub-broker introduced the risk, they earn a split of the broker's commission
• MGA commission: the MGA's fee for underwriting and managing the policy
• Net premium: what's left after all commission, taxes, and stamp duty are deducted. This is what gets settled to the carrier

Insurance commission tracking and net premium calculation across hundreds of policies, each with different commission structures, is another spreadsheet that BBNET replaces.