How Zurich Leveraged AI to ‘Insure’ 85% Straight-through Cash Posting

About Zurich

Zurich Insurance Group Ltd. is a Swiss insurance company, commonly known as Zurich, headquartered in Zürich, Switzerland. The company is Switzerland’s largest insurer. Zurich as a company shares risk expertise and insights with customers, communities, and stakeholders.

Cash Application Landscape at Zurich

Now, cash application for an insurance company can be very tricky. It requires timely determination of premium payments, broker margins and claims. In simpler words, running cash application operations for an insurance company can become tedious as every step needs to be completed in a stipulated time frame to avoid any complications.

The cash application system that existed in Zurich was primarily manual with six full-time employees. All the payments were processed one by one. The incoming payments needed to be matched with the correct account details. Further, the analyst had to update all the open A/R accounts on SAP while keeping the bank informed.

As seen above, the whole process was labor-intensive and lacked a centralized system where the analysts could manage the accounts systematically. All of these factors contributed to making the process inefficient and left a lot of scope for improvement.

Key Challenges

The key areas of improvement included –

• 100% manual process for Wire and ACH application, which made cash application time-consuming and error-prone
• Regular delays in cash application caused DNOC (Direct Notice of Cancellation).
• Inaccurate cash posting, leading numerous internal calls within the company which led to further delays and disputes.

These challenges not only slowed down the cash application process as a whole but also negatively impacted operations and customer experience.

To tackle and nullify these challenges, Zurich implemented various solutions. However, finding the right solution was more than just looking for a solution that addressed their current challenges. It was also about looking for something scalable and dynamic that would hold true for the evolving market trends.

The Journey Ahead – Trial & Errors

In the quest for an effective cash application system, Zurich followed a hit and trial method for identifying the right solution. They started with an in-house process using legacy systems but switched to SAP in 2007. This made the process less manual, however, a lot of challenges remained. The next step was to adopt lockboxes for easier payments capturing and posting in 2009.

Three years down, the cash application team realized that their process was still not as efficient as they had estimated. While the evolving solutions had resolved some pain-points, a lot of bottlenecks were still eating up their bottom line and resources.

In 2012, Zurich outsourced the entire process to a 3rd party, which allowed them extra space and resources to capture data from ACH and wires. This helped them reduce payment time, minimize interactions with brokers and analyze check payment trends. While the outsourcing partner helped to make the whole system much more compact and connected, the team was unable to reduce payment posting time, minimize time spent on research for ACH payments and ensure faster cash posting.

The following year, Zurich implemented Electronic Lockboxes to receive ACH and wire payments. This enhanced the entire process with reduced payment research time, automated payment posting, improved transparency while reducing expenses in outsourcing.
For all the benefits that electronic lockboxes came up with, Zurich still had a long way to go.

They further wanted to reduce the time and resources spent on posting payments, minimize errors made during the cash application, match the payments faster and accurately while minimizing manual intervention.

After various solutions and multiple implementations, the team decided to identify a clear set of requirements and goals.

Key Objectives – The Bucketlist

The goals and objectives for the team included:

• Competing with the market
• Getting ahead of customer banking trends
• Increasing electronic transactions
• Improving customer satisfaction
• Applying for payments more timely and accurately
• Reducing the expenses allocated to cash processing

This brought them to Project BEER (Bringing Efficiency by Enabling Robotics).

Project BEER

Results Across the Board

With Project BEER, Zurich was able to:

• Enable same-day cash posting
• Reallocate 6 FTEs to high-value tasks
• Reduce bank keying fees
• Automate dunning (reminders for payments)
• Improve customer experience

What was Project BEER?

Bringing Efficiency by Enabling Robotics – this constituted of an automated cash application solution – a single, centralized system that not only enabled real-time sync between the bank & Zurich but also met the goals and objectives set by the team.

To Zurich’s delight, the results have been tremendously encouraging and they have moved forward by leaps and bounds by not only achieving their goals but also improving the overall process efficiency.

Automation, at first sight, can look very daunting as implementing it can be difficult if not done right. However, with the right partner and clear goals, automation can not only smoothen and streamline but also help achieve great metrics. It’s time to learn more about Cash Application with HighRadius.

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