This piece is by Curt Hess, US Executive President, Vitesse
The insurance industry has invested heavily in claims. Faster first notice of loss (FNOL), smarter triage, better customer communication, AI-assisted decisioning. All of it matters, and a lot of it is working. But there is a layer underneath all of that investment that has not kept pace, and it is the layer that ultimately determines whether a claimant actually gets paid.
Funds rarely travel directly from capital holder to claimant. In most delegated authority arrangements, they pass through a broker, an MGA, a TPA, sometimes more than one. That chain is where complexity lives, and it is where visibility disappears. A carrier can build a world-class claims operation and still find itself dependent on a financial system that was never designed for the problem it is being asked to solve.
The tools most carriers are using were borrowed from general banking. They work reasonably well in simple structures. However, at the scale and complexity of a modern insurance program, they do not. The result is a system that looks like it is under control but, in practice, is not. Carriers are, at time, operating in the dark — the last to know when something goes wrong, but the first to absorb the consequences.
The 45-Day Blind Spot
When a TPA manages claims on a carrier’s behalf, it sends a bordereau report summarizing fund activity: what came in, what went out, what the balance looks like. The problem is that report arrives roughly 45 days after the period it covers.
A carrier treasurer reviewing that data today is looking at a picture from six weeks ago. The fund could have been drawn down faster than expected. It could be sitting overfunded with capital earning nothing. In either case, nobody on the carrier side would know until the next report arrived.
And, the numbers reflect it. Only 32% of finance leaders say they have any visibility into delegated claims funds, and in the US, 74% of insurers report difficulty accessing readily available funds across their TPA relationships, according to a survey of more than 200 senior insurance professionals conducted earlier this year. That is not a payments problem. It is a visibility problem, and the 45-day reporting cycle sits at the center of it. By the time something looks wrong in a bordereau, it has typically been building for weeks.
Cash Calls Are Reactive by Design
The most immediate consequence of that visibility gap is the cash call. Because carriers have no real-time picture of fund positions, they usually find out a TPA account is running low when the TPA comes back and asks for more money. At that point, claims are already stalling. Claimants are waiting. In some cases, regulatory settlement timelines are being missed.
No finance team in any other context would accept finding out about a shortfall only after the account hits zero. A corporate treasurer managing working capital operates with real-time visibility as a baseline expectation. In claims fund management, the industry has accepted a model where the carrier is structurally the last to know. That creates regulatory exposure, claimant experience failures, and reputational risk, all of which trace back to the same root cause: a reporting model that was never designed to give carriers the visibility they need.
Trapped Cash and the Cost of Not Knowing
The flip side of the cash call problem is just as costly, and far less visible.
Because carriers cannot see their real-time fund positions, the rational response is to overfund accounts as a buffer. Across a book with dozens of TPA relationships, that logic compounds quickly. Across the carriers we work with, overfunded and forgotten accounts are a consistent finding, and this is not a one-off case. In one instance, a carrier discovered more than $135 million sitting across delegated parties in the market, more than $65 million of which had been untouched for years. Nobody had flagged it. Nobody had moved it. It simply did not exist in any picture the carrier could see.
In any other financial context, a CFO carrying that much idle capital across that many accounts would face hard questions. The insurance industry has normalized it because the alternative, running short and triggering a cash call, feels like the greater risk. That is a direct consequence of operating without real-time visibility, and better infrastructure solves both problems at once.
FBO Accounts: Structural Control Without Operational Visibility
The standard answer to the delegation problem is the For Benefit Of (FBO) account. A TPA opens an account and designates the carrier as the beneficiary, treating that structure as a sufficient control mechanism. It is generally accepted across the market as a reasonable way to manage the arrangement.
But FBO is a banking concept, not an insurance one. It was designed to hold money on behalf of another party in a relatively straightforward structure. It was not designed to handle the high transaction volumes or the layered financial logic of a multi-carrier quota share, where different carriers are responsible for different layers of the same loss. It does not provide a real-time audit trail, and, in practice, it often leads to overfunding as carriers are forced to buffer against what they cannot see. It does not give a carrier a consolidated view across all their TPA relationships at once. And the banks administering those accounts have no particular expertise in insurance program structure.
What carriers have is a structure that provides legal separation of funds but not operational visibility into those funds. At scale, across dozens of relationships, that distinction matters considerably more than the industry has historically acknowledged.
What Good Actually Looks Like
The answer is not better banking, nor is it more complex FBO accounts, upgrading to larger banking partners, or faster bordereaux cycles. None of that addresses the fundamental mismatch between how insurance programs are structured and how the funds behind them are managed.
The carriers who can actually see what is happening to their funds across their TPA relationships will not just pay faster. They will carry less idle capital, face fewer regulatory pressure points, and have a cleaner line of sight into one of the largest pools of funds on their balance sheet. The question facing carrier finance and treasury teams is not whether the industry needs to move in this direction. It is how long they can afford to wait before the gap between their claims operation and their ability to see and control what happens to their funds starts showing up somewhere they cannot ignore.
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