Specialty Insurance Wholesaler Maximizes M&A Value

Finance executives' strategy accelerates accounting process integration.

"The world of risk is getting more complex."

Senior Accounting Manager

About The Specialty Insurance Wholesaler

Despite macroeconomic conditions, specialty insurance firm consolidation is at an all-time high. (Trem, 2024). “The world of risk is changing,” confirms a senior accountant at a newly acquired specialty insurance wholesaler. “The acquisition expanded our parent company’s specialty programs division to meet growing demand in today’s challenging marketplace," she said. The deal created one of the largest specialty program management operations in North America, serving over 10,000 insureds and writing over $3 billion in annual premiums across 30 brands.

The Challenge

Not all M&A deals yield value. Finance and accounting teams often bear a significant portion of the integration workload, reconciling complex financial statements, processes and systems. “After the merger, we found several differences in our accounting practices,” the senior accountant noted. The parent company’s accounting policies required accounting team members to become subject matter experts focused on one task. The accounting team faced an accelerated timeline to adopt the new operational practices. “Adapting to the workflow rules and policies was a challenge, because our accounting team was very small,” said the senior accountant. “Given the limited amount of time, we were concerned about our ability to function properly under the new policy guidelines. Our parent company introduced us to an offshore provider, but it wasn’t a good fit,” said the senior accountant. Payment posting delays increased and fixing errors took multiple business days because the offshore team worked limited hours in a different time zone.

The Solution

Parent company executives made the strategic decision to introduce the accounting team to Patra. "We learned executives were collaborating with Patra to develop new workflows for another department," explained the senior accountant. After reviewing the Standard Operating Procedures (SOPs) the department developed with Patra, the accounting team decided to create SOPs to fit the new accounting policies. "Patra stepped in to assist with payment posting, which freed our team to focus on becoming subject matter experts in other areas," the senior accountant added. Patra’s processing team adhered to the parent company’s payment processing schedules. "In my view, this was a great fit because Patra was able to seamlessly operate within our work hours," said the senior accountant. Patra’s processing executives worked closely with the accounting team, adhering to the parent company's guidelines and ensuring consistent, accurate operations.

Client Profile:

  • Specialty
  • New York

Challenges:

  • Inconsistent accounting processes & policies
  • Tight timeline to adopt new process workflows
  • Payment posting delays

Requirements:

  • Post-merger integration support
  • 24-hour service availability
  • Robust Standard Operating Procedures

Patra Solution:

Positive Outcomes:

  • Accelerated adoption of new accounting policies
  • Improved payment posting efficiency
  • Same-day error resolution

Results

Despite significant complexity, the accounting team met the accelerated deadline and successfully transitioned to the new accounting policies. The senior accountant highlighted three key areas where Patra made a significant impact:

Time Zone Friendly Service & Support: “If I alerted the previous offshore team about an issue with payment posted, it was fixed after my team’s working hours,” said the senior accountant. “Communicating changes or errors identified during the workday is very important,” said the senior accountant. “We have many time constraints and deadlines governing when payments are sent or when stop payments are issued.” Patra’s 24-hour service and support helped the accounting team resolve errors and streamline the posting of payments. “The work is done during our current business hours, so that’s the best fit for us,” said the senior accountant. “That’s one of the things I really like.”

Lock-Step Communication: “Patra’s processing executives are very good at alerting me when an accounting team member submits information outside of our SOPs. That was not always the case with our previous provider,” commented the senior accountant. The improved communication dynamic fostered a culture of continuous process improvement. “When new issues come up, we’re able to actively discuss and refine our SOPs to mitigate future errors. “It’s a very good result that has evolved out of our working relationship with Patra,” said the senior accountant.

Enhanced Quality Assurance: Expecting employees to work with speed and agility is unrealistic when they have to memorize and retain information about new workflow processes. “It always takes time for teams to adjust to operational changes, and I’m not the only accountant,” she said. “Patra’s processing experts became adept at finding mistakes I didn’t catch,” said the senior accountant.

Conclusion

Mergers and acquisitions offer insurance organizations valuable opportunities to grow, diversify, and strengthen their market position. But conflicting business operations can quickly undermine the value of any deal, making post-merger integration a critical measure of success. Outsourcing is an effective strategy to ensure smooth integration. Patra’s on-demand global processing experts provide 24/7 support, helping insurance wholesalers maintain quality and accuracy as they navigate post-merger transitions. With Patra’s expertise, insurers can achieve operational synergies and maximize the ROI from M&A transactions.

Sources

Trem, P. (2024, April 1). “Specialty firm acquisitions hit new high.” Leader’s Edge.

About Patra

Patra is a leading provider of technology-enabled outsourcing services and software solutions to the insurance industry. Patra powers insurance processes by optimizing the application of people and technology, supporting insurance organizations as they sell, deliver, and manage policies and customers through our PatraOne platform. Patra’s global team of over 6,500 process executives in geopolitically stable and democratic countries that protect data allows agencies/brokerages, MGAs, wholesalers, and carriers to capture the Patra Advantage – profitable growth and organizational value.

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