Bordereaux

What is Bordereaux?

Bordereaux (pronounced "bore-duh-ROW," plural of the French word "bordereau") are detailed listing reports that MGAs, coverholders, and other parties operating under delegated authority provide to their carrier partners. These reports list every policy written, endorsement issued, or claim processed during a specific period, along with comprehensive details about each transaction.

Think of bordereaux as the carrier's window into the book of business being underwritten or the claims being handled on their behalf. Since the carrier has delegated authority to bind coverage or settle claims, they need detailed, regular reporting to monitor the business being produced, track premium and exposure, oversee claims activity, and ensure compliance with underwriting guidelines and claims settlement authorities.

Bordereaux are contractually required under most binding authority and delegated claims settlement agreements. The frequency (monthly, quarterly), format (specific column requirements and calculations), and submission deadlines are defined in the binder agreement between the MGA and carrier. Failure to submit accurate, timely bordereaux can result in contract termination, withheld commissions, or loss of binding authority.

Why MGAs and Delegated Authority Arrangements Require Bordereaux

The fundamental dynamic of delegated authority creates the need for bordereaux: the carrier bears the financial risk while the MGA or coverholder makes underwriting or claims decisions on the carrier's behalf. This separation of decision-making from risk-bearing requires robust reporting and oversight.

Carrier Oversight and Governance: Carriers need to monitor whether MGAs are adhering to underwriting guidelines, staying within binding authorities, selecting risks appropriately, and making sound claims decisions. Bordereaux provide the transaction-level detail needed to audit compliance. Carriers analyze bordereaux to identify problematic patterns - concentration in high-risk industries, policy limits exceeding guidelines, claim settlement amounts above authorities, or adverse loss ratios on certain coverage types.

Premium Tracking and Collection: The carrier's accounting depends on accurate bordereaux. Premium bordereaux show exactly what policies were written, what premium was charged, how commissions were calculated, and what net premium is owed to the carrier. The carrier uses this data to reconcile premium payments from the MGA, track premium by state and coverage line, and generate statutory financial reports.

Risk Monitoring and Exposure Management: Carriers need to understand their aggregate exposure. Bordereaux data enables the carrier to monitor total insured values, geographic concentration, industry concentrations, and accumulated limits. This information feeds into the carrier's catastrophe modeling, reinsurance purchasing, and risk management decisions.

Regulatory Compliance: State insurance departments require carriers to report premium by state, line of business, and other dimensions. Carriers depend on bordereaux data from their MGAs to compile these regulatory reports accurately.

Types of Bordereaux: Premium vs. Claims

Bordereaux fall into two main categories, each serving distinct purposes:

Premium Bordereaux (Policy Bordereaux): These report all policy transactions - new business, renewals, endorsements, and cancellations. Each row typically represents one policy or endorsement and includes: policy number, named insured, effective date, expiration date, coverage types and limits, premium breakdown (by coverage), commission calculations (retail agent commission, MGA override, net premium to carrier), insured values and exposure metrics (total insured value, revenue, payroll, etc.), risk characteristics (construction type, protection class, industry code, territory), and cancellation information if applicable.

Premium bordereaux enable the carrier to understand what business was written, calculate premium owed, monitor risk quality, and ensure guideline compliance.

Claims Bordereaux: These report all claim activity - new claims, claim payments, reserves, and closures. Each row typically represents a claim or payment and includes: claim number, policy number, insured name, date of loss, loss description and cause, coverage under which the claim is filed, claim status (open, closed, reopened), paid amounts (by coverage and payment type), outstanding reserves (case reserves by coverage), recovery information (subrogation, salvage), claim adjuster or examiner, and settlement date if closed.

Claims bordereaux let the carrier monitor claims activity, track loss ratios, identify large or problematic claims, and reconcile claim payments.

Required Data Fields and Carrier-Specific Formats

While industry conventions exist, each carrier specifies their own bordereaux format with required fields, column order, calculations, and data validations. This carrier-specific variation creates significant challenges for MGAs who work with multiple carriers.

Format Variation: Carrier A wants premium bordereaux in Excel with 47 columns in a specific order. Carrier B requires CSV with 52 fields. Carrier C uses their proprietary portal format. An MGA working with 5 carriers must produce 5 different bordereaux formats each reporting period, each with unique requirements.

Calculation Differences: Commission calculations vary by carrier. Some want gross premium minus commission. Others want net premium plus commission shown separately. Some require tax calculations. Others handle taxes separately. Each calculation formula must be implemented precisely according to carrier specifications.

Submission Schedules: Carriers specify different submission deadlines. Carrier A requires monthly bordereaux by the 10th of the following month. Carrier B wants quarterly bordereaux within 30 days of quarter end. Carrier C requires weekly claims bordereaux. Managing these varying schedules and ensuring timely submission is an operational challenge.

Data Validation Rules: Carriers often have specific validation requirements. All policy numbers must follow a format pattern. Dates must be within certain ranges. Premium calculations must reconcile to totals. Submission files that fail validation get rejected, requiring rework and resubmission.

The Pain of Manual Bordereaux Assembly

For MGAs operating without automation, bordereaux preparation is a monthly nightmare consuming days of staff time and introducing error risk:

Data Collection Across Systems: The source data lives in multiple places - policy system, agency management system, commission tracking spreadsheets, claims system, accounting system. Staff must export data from each system, manually combine it, and reconcile discrepancies. A mid-sized MGA might handle 500-2,000 policy transactions per month across multiple carriers, each requiring data from 3-5 different systems.

Manual Excel Assembly: The classic bordereaux process involves copying data exports into Excel templates, writing formulas for commission and premium calculations, manually formatting columns to match carrier specifications, adding required totals and subtotals, and validating that everything reconciles. This process is repeated for each carrier. A single formula error can ripple through thousands of rows, creating incorrect premium calculations.

Format Inconsistencies: Different staff members create bordereaux differently. Column headers vary. Formulas are inconsistent. Formats change from month to month. This inconsistency creates carrier rejection, rework, and relationship friction.

Submission Delays: The manual process is slow. What should take hours takes days. Staff work weekends to meet carrier deadlines. Rushed work increases error rates. Delayed bordereaux anger carrier partners, delay premium settlement, and risk binding authority suspension.

Audit Trail Gaps: Manual Excel processes lack audit trails. When carriers question a premium calculation or claim payment, there's no systematic way to trace back to source data and demonstrate how the figure was calculated. This creates audit challenges and disputes.

Automated Bordereaux Generation

Modern automation eliminates manual bordereaux pain through systematic data integration and formatting:

Automated Data Integration: The system connects to policy administration, claims, and accounting systems via APIs or data extracts, pulls relevant transactions automatically based on reporting period, matches policy and claims data across systems, and assembles complete records without manual data gathering.

Carrier-Specific Templates: Each carrier's bordereaux format is configured once with column specifications, calculation formulas, validation rules, and formatting requirements. The system applies the correct template automatically based on which carrier the policy or claim belongs to.

Automated Calculations: Premium calculations, commission breakdowns, tax calculations, and totals are computed automatically using configured formulas. The system ensures calculation consistency and accuracy across all transactions.

Validation Before Submission: The system validates bordereaux against carrier requirements before submission - checking required fields are populated, verifying calculations reconcile, confirming date ranges are valid, and flagging potential errors for review. This prevents submission rejections and rework.

Scheduled Generation: Bordereaux are generated automatically on schedule (monthly, quarterly, weekly) and sent to designated recipients. No more manual calendar tracking or last-minute scrambling to meet deadlines.

Complete Audit Trail: Every data source, calculation, and transformation is logged, creating a complete audit trail from source system transaction to final bordereaux output. When carriers have questions, the MGA can instantly trace any figure back to its source.

The Strategic Value of Bordereaux Automation

Automating bordereaux delivers benefits beyond time savings:

Carrier Relationship Strength: Timely, accurate bordereaux demonstrate operational competence and professionalism. Carriers are more confident in MGAs who consistently deliver clean reports on schedule. This confidence translates into larger binding authorities, better terms, and stronger partnerships.

Scalability: Manual bordereaux processes don't scale. An MGA that can barely handle 2,000 policies per month manually can't grow to 5,000 without adding significant staff. Automation removes this scaling constraint.

Risk Reduction: Automated calculations eliminate formula errors. Systematic validation prevents submission errors. Complete audit trails reduce dispute risk. The MGA operates with greater confidence and lower operational risk.

For MGAs and coverholders, bordereaux automation isn't optional - it's fundamental infrastructure for professional operations and sustainable growth in delegated authority business.