Automating PMI claims payments

ITIJ 213, October 2018
Mike Shamburg, Vice-President of Global Payments Solutions at AscendantFX, predicts that as global mobile work forces rise, so will the automation of PMI claims payments
Global mobility management can be a stressful process for employees and corporations alike. Picking up and starting a new life is not easy, especially when employees have families to bring with them on the journey. The prospect of relocation comes with moving parts, from obtaining housing to finding schools, and it’s likely a process more employees will face in the future as the number of expats working abroad continues to rise. International assignee levels have increased by one-quarter over the past decade and by 2020, PwC predicts a 50-per-cent increase in overseas assignments with women projected to make up over one-quarter of all assignees. Relocation assignments can be a rewarding experience for an employee’s professional development; however, expatriate deployment is often accompanied with difficulties when it comes to private medical insurance premiums and other types of payments.  
Controlling costs in mobility programmes
On average, corporations are spending US$300,000 annually in global mobility programmes, and for the majority of relocation managers, controlling costs remains their number one priority. Streamlining the payment life cycle when it comes to international private medical insurance (IPMI) premiums, as well as other transferee related payments for tenancy management, temporary housing, schools, cost of living allowances etc., have a direct impact on the bottom-line revenue for a business. Wires and Automated Clearing House (ACH)/low value transfers are the most common payment instruments used for private medical insurance (PMI) premiums; some corporates will pay the such premiums as a recurring monthly expense and sometimes semi-annually or annually for expats. Sending an international wire is simple in theory, if you have the right wire instructions. However, when transferees open a new bank account in their host country, it can be confusing and often difficult for them to relay the proper banking instructions to their organisation. Due to the differences in banking data requirements in their host country and the lack of familiarity with banking instructions in general, expats can inadvertently contribute to the delay in delivering these funds.
On average, corporations are spending $300,000 annually in global mobility programmes  
The fewer complications via payment delays or other payment related difficulties expats experience, the greater peace of mind they will have and, ultimately, the more productive they will be. For instance, receiving PMI payments consistently and in the amounts as agreed upon are primary concerns of international transferees at organisations I work with. Often an unseen complication, lifting fees can be deducted as the payment passes through correspondent banks on its way to the payee, causing the delivered amount to be less than expected. The focus for the transferee’s employer, the outsourced global mobility organisation and the money transfer entity, must be on proactively addressing these and other disruptive issues, which can negatively affect payments to foreign employees.
The traditional PMI process: payment return and resend 
For multinational organisations and relocation companies, traditional pain points include effectively managing the complexity of each country’s banking requirements as well as accurately administering frequent changes to transferee banking instructions – each of which can acutely affect the quality execution and delivery of payments. Factors include receiving incomplete and inaccurate payment instructions from payees, managing foreign exchange/conversion and fee costs, returned payments which need to be ‘topped off’ and changing compliance requirements. A common contributor to these problems at companies I work with is multiple payee templates, inadvertently created for the same payee, which can cause misdirected or returned payments and with additional costs routinely applied.
The fewer complications via payment delays or other payment related difficulties expats experience, the greater peace of mind they will have
Keeping mobility programme costs under control to make a profit is difficult for companies when they do not carefully monitor foreign exchange and fee expenses and invest in flexible, reliable technology and functionality that can solve the unique challenges present during the payment process. For instance, some non-bank payment providers include functionality to catch payment instruction mistakes prior to release, while some banks will often release payments without confirming the accuracy of banking details, causing a lengthy ‘payment return and resend’ process and ‘topping up’ as fees can be assessed when returned. Additionally, after payments are made, line items are often updated manually to the general ledger and thus prone to human error. Simply uploading post transaction reports, provided by the payment entity, into your enterprise resource planning (ERP) /accounting system can eliminate these errors.  
Key impact to the bottom-line revenue 
Transferees expect to receive their funds in a timely manner, and automation of the payments process can deliver greater accuracy and faster processing to ensure their needs are met. Businesses can also expect a greater return on investment because their ERP or other accounting platform can be fully utilised to automate payments procedures. For example, organisations often want to see the premium per each individual so that they do not have to code a large vendor invoice to multiple individuals and cost centers from their side via the AP department. We see a highly impressive, measurable decrease in payment returns through the application of proven technology, ensuring businesses are profitable in the long-term.
The rise of a global mobile workforce will have a positive impact on the automation of PMI claims and other types of international payments.