Collection performance is measured by the net back you receive. Net back is defined by the percentage of money you receive after an agency commissions are deducted divided into the net assignment. Many companies make the costly mistake of selecting an agency that offers the lowest fee schedule. Collection agencies are for profit businesses. A lesser fee schedule results in lesser quality services; ultimately translating into lesser revenue. Less revenue means cost reductions. Less resources mean reduced performance. Lower performance results in more accounts having to be litigated, higher DSO, longer carrying costs, more business interruptions with client’s staff, etc.
“The greatest cost to an insurance creditor lies within accounts not being collected”
Reducing exposure & claims administration..The Dilema of Duplicate Coverage.
In premium collections, recovering the audit, earned or group premium debt amount is the most important. Of important financial value is reducing exposures and having the ability to subrogate any claims paid.
Frequently debtor insureds or their agents have replaced certain coverages with another carrier. Conventional collection agencies do not view these matters as cash recoveries and therefore make little if any effort to obtain duplicate coverage documentation.
We view obtaining other coverage documents being of equal importance as premium collections and part of our due diligence. We consistently obtain the highest volume of these documents. This allows insurers to:
a. Reduce their exposure to loss and lower their taxable premium
b. Efficiently subrogate any claims paid