What is a bordereaux in insurance?
A bordereaux (plural: bordereaux) is a detailed report sent from an MGA or coverholder to the capacity provider (carrier or insurer), listing all policies bound, premiums collected, or claims incurred under a delegated authority arrangement.
Two types of bordereaux
There are two primary types of bordereaux used in delegated authority insurance:
Premium bordereaux
Lists all policies bound and premiums due (or collected) during a reporting period. Includes policy details, insured names, risk locations, sums insured, premium amounts, taxes, and stamp duty. This gives the carrier visibility into what has been written on their behalf.
Claims bordereaux
Lists all claims reported, reserves set, and settlements made during a reporting period. Includes claim reference, policy details, date of loss, reserve amounts, and payments made. This gives the carrier visibility into the claims experience on their book.
Why bordereaux matter
Bordereaux are the primary mechanism by which carriers monitor their delegated authority arrangements. When a carrier grants an MGA or coverholder the authority to bind policies on their behalf, they need a structured way to see what's being written, what premium is being collected, and how claims are developing.
Bordereaux are typically a regulatory requirement for delegated authority business, particularly in Lloyd's of London and other regulated markets. They're usually produced monthly or quarterly, depending on the terms of the binding authority agreement.
The problem with manual bordereaux
Most MGAs still produce bordereaux manually. The typical process looks like this:
- Pull policy data from one system (or spreadsheet)
- Pull premium data from the bank or accounting system
- Cross-reference to determine what's been collected
- Calculate stamp duty and taxes per jurisdiction
- Format the data into the carrier's required template
- Repeat for each carrier, each with different column requirements
This process typically takes 1–2 days per carrier per reporting period. It's error-prone, produces reports that are already stale by the time they're sent, and consumes significant operations capacity.
How bordereaux automation works
Bordereaux automation eliminates manual BDX compilation by generating the report as a byproduct of the underlying transaction. When premium is received and reconciled against a policy, the bordereaux entry is created automatically.
With BBNET, bordereaux generation is triggered by payment events. When a premium payment is matched to a policy:
- The policy details are already in the system from the bind
- Stamp duty is calculated automatically based on the risk jurisdiction
- The BDX entry is created in the carrier's required format
- The carrier receives a standardised, accurate report within hours, not weeks
The same principle applies to claims bordereaux: when a claim is notified, reserved, or settled, the claims BDX entry is generated automatically.
Related terms
- Delegated authority in insurance, the arrangement that creates the need for bordereaux
- What is an MGA?, the intermediary that typically produces bordereaux
- How to automate bordereaux, practical guide to eliminating manual BDX