Page 3 of How to Evaluate a Billing-as-a-Service (BaaS) Provider

Administrative Support and Services

In addition to policyholder services, there are a number of additional services that are relevant to the insurer that are generally provided by a BaaS provider.

Accounting services:

Lockbox administration: Some providers manage their own. Others partner with a bank. Some can use the lockbox you've already set up.
Agency sweep: Those insurers offering agency bill typically sweep the agents' accounts on a daily basis. BaaS providers often offer sweep services that include agency sweep accounts in your daily deposits.
Trust account: Look for a jointly held premium trust account, where the premium collected is deposited until remitted to the insurer. Verify a conservative investment strategy is in place for the trust account.
Delinquent premium collections: Some BaaS providers partner with third party collections agencies to handle uncollected earned premium or final audits. Others can work with the customer to create payment plans for delinquent payments as an intermediary step prior to sending to collections.

Escheatment:

On a rare occasion, a return premium payment may go uncashed. After a period of time, these unused funds escheat to the state as unclaimed property. Payees are required to be notified prior to funds being escheated. BaaS providers can handle the escheatment processes for each state as needed. They take on the payee notification and they turn over the funds to the state according to each state’s processes.

Marketing services:

Most BaaS providers include some capabilities for marketing within the bill. Some support agency branding. Some provide the ability to include marketing messages on bills. Some include assistance in developing marketing programs for you to drive demand for paper-free billing. Look for tools that make it easy for the marketing team to easily change and customize the marketing aspects of the bill. You’ll likely find tools to add marketing and/or cross-selling messages on the portal as well.

Reporting tools:

You may find a combination of standard reports, ad hoc reporting capabilities, and graphic visualization tools with drill-down capabilities. Check to see that the reports are downloadable on demand.

Reporting data:

Look to see if you get real time data or regular data files that aggregate data across all the remittance channels for easy reconciliation. Compare the level of detail provided across bill and payment history, payment reversals, fees generated, activity logs, NSF transactions, etc. Look for a clear audit trail of transactions.

Administrative portal:

The portal provides the insurer with access to data and administrative tools. Typical features include the following:

Tools to easily add marketing messages to the bills.
Access to scheduled reports or ad hoc reporting tools.
Reconciliation tools.
Administrative access to add insurer users and manage their permissions.
Ability to search by policy number, named insured, date of payment, and other dimensions.
Tools to take specific actions on specific accounts, such as blocking specific bill plans or payment methods for high-risk accounts.

Technical Functionality

While assessing features and functionality is a critical step in selecting a BaaS provider, there are a number of technical considerations to be considered as well.

Security: Look for PCI compliance at the least; but you’ll also want to look at compliance with the Gramm–Leach–Bliley Act (GLBA) and National Automated Clearing House Association (NACHA). Look for SOC I- and SOC II-level security. Tokenization and two-factor authentications are typically used.
Integration: These services work best with integration. Check to see if they have integrated with your billing system in the past. If not, look at how they handle integration, whether with real time APIs, batch-file transfers, Web services, or other mechanisms.
Cloud-based: Some solutions are cloud-based. Look to see if the solution is hosted in a private cloud or public cloud, as you’ll want to make sure the BaaS provider’s SLAs are sufficient for your customers.
Web responsive: Responsive design for customer-facing applications makes it easy for customers to access from any device.

Other Vendor Considerations

When evaluating a partnership with any vendor, an insurer should also consider a variety of other factors.

Functional specialization: Some vendors do nothing but BaaS. Others include this as one outsourcing capability among many.
Industry knowledge: Some vendors provide services across industries. Others specialize in the insurance industry, and their processes have been tuned to the insurer’s needs.
Regulatory knowledge: Make sure the vendors have knowledge of the regulatory issues associated with your line of business. Those vendors that specialize in insurance are more likely to understand some of the nuances that impact this industry.
Stability: Assess factors such as the vendor’s stability, years in business, and knowledge of the insurance industry, as well as the unique nuances of industry processes and the level of ongoing investment in the solution.
Implementation: Look at the vendor’s experience with implementation and technical support. Generally, implementations are relatively fast.
Customer service: Check the service-level agreements regarding the level of service the vendor will provide to your clients. This is an area that done poorly can impact your brand.