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The Insurance Billing and Payment Enterprise Services (ES) bundle service-enables Customer Billing and Payments for Insurance.

The Insurance Billing and Payment ES bundle leverages enterprise SOA by service-enabling Customer Billing and Payments for Insurance, allowing this application to provide key information to other applications.

As the insurance carriers usually use SAP and several non-SAP applications in the realization of one business process, the system landscape tends to be vast and highly complex. The Insurance Billing and Payment ES bundle supports this heterogeneous and widely distributed system landscape by facilitating the information flow between the applications.

The bundle's enterprise services enable the communication between Customer Billing and Payments application specifically the SAP Collections and Disbursement (FS-CD) system and other SAP applications. Furthermore they allow the flow of information between FS-CD system and the many third-party systems typically deployed in an insurance company such as Policy Management systems, Claims Management systems, and Commissions Management systems, amongst others. This ES bundle enables these latter insurance applications to be informed for example about the status of customer payments in SAP Collections and Disbursement system in an outbound mode via XML interfaces.
For example, if a customer does not pay his premium for a considerable period of time and has reached a specific dunning level, an enterprise service is invoked to inform neighboring systems such as a Policy Management system about this situation so that a possible policy cancellation can be triggered.

Insurance Billing and Payment
(click to enlarge)

On the other hand this bundle's enterprise services allow the information flow from calculating neighboring systems into the Customer Billing and Payments application and its respective set up in terms of master data and posting data in the system. For instance, when a policy is created in a Policy Management application, the Collections and Disbursement (FS-CD) system will be informed in inbound mode about this and automatically store the master data such as bank account details and the premium amount.

Audience

All insurance providers, either traditional insurance carriers or companies that practice self-insurance, can benefit from the services provided in this ES bundle.

For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.


How To Use This ES Bundle

This ES bundle enables the transfer of customers' billing and payment information from the SAP Collections and Disbursements (FS-CD) system to other operational systems in the insurance environment. Furthermore it is also possible by means of these enterprise services to receive information provided by those systems and set it up in the SAP FS-CD.

This bundle can be used to facilitate the integration of Customer Billing and Payments functionality seamlessly and easily into other SAP applications (SAP Policy Management, SAP Claims Management, SAP Incentive and Commissions Management) or third-party Policy Management, Claims Management, Commissions Management applications, amongst others.
This implies a reduction of Total Cost of Ownership (TCO) for implementation and maintenance activities in contrary to the past, when the integration with other operational systems in the insurance system landscape and the implementation of specific interfaces required an expensive custom integration.

The following series of use cases for the Insurance Billing and Payment ES bundle shows how different outcomes can be achieved by using enterprise services in different combinations. While these examples illustrate a few of the ways in which this ES bundle could be used, the intention is to show the flexibility and reusability of these business objects and enterprise service operations so that you will have a clearer understanding of how to best deploy them in your own environment.

This wiki is also a space for you to share knowledge and collaborate with others who implement the Insurance Billing and Payment ES bundle.

ES Bundle - Table of Contents

Use Cases

Use Case 1 - Creation of a new Insurance Contract

An insurance customer has purchased a new insurance policy that provides him with third party liability coverage for his new car.
The insurance clerk prepares all necessary documents by entering the details in the Policy Management system. This information will be reproduced automatically in Customer Billing and Payments application, more specifically in the sub ledger accounting system SAP Collections and Disbursements (FS-CD) system by means of Create Insurance Collection Disbursement Request as Bulk enterprise service, which uses the Insurance Collection Disbursement Request business object.

Create Insurance Collections Disbursement Request as Bulk enterprise service automatically creates the following master data in the Customer Billing and Payments application:

  • Insurance business partner role 'contract partner - MKK' for existing SAP Business Partner
  • Payment details such as credit card or bank account details
  • Standardized insurance object with default values and respective contract account via contract account creating variants
  • Payment plan items with a specific type and only one-time payments


Step

Enterprise Service Invoked

Step 1: Process policy application and create insurance contract in Policy Management system

(No enterprise service is invoked during this step)

Step 2: Calculate premium in Policy Management system

(No enterprise service is invoked during this step)

Step 3: Post premium in SAP Customer Billing system

Create Insurance Collection Disbursement Request as Bulk


(Back to ES Bundle - Table of Contents )

Use Case 2 - Endorsement of Insurance Contract

An insurance customer would like to increase the level of insurance coverage for his car. He contacts his insurance agent in order to purchase the additional coverage - a fully comprehensive cover as of January 1st.

Due to a very intensive business season in the beginning of the year the insurance clerk is forced to process the customer's application with some delay around mid January. Nevertheless the policy will be valid retroactively as of January 1st.

As the Policy Management application does not allow delta postings, the clerk will have to cancel the existing posting for January and create a new one. To do so he will invoke from the Policy Management application the Cancel Insurance Collection Disbursement Request enterprise service which uses the Insurance Collection Disbursement Request business object.

In order to create the insurance contract, the insurance clerk enters the details in the Policy Management application. This information will be reproduced in the SAP Collections and Disbursements system by means of Create Insurance Collection Disbursement Request as Bulk enterprise service, which will actively create the respective master data such as the insurance relevant business partner role, the payment details, the insurance object and the corresponding payment plan items.


Step

Enterprise Service Invoked

Step 1: Calculate new premium in Policy Management system

(No enterprise service is invoked during this step)

Step 2: Cancel old premium in SAP Customer Billing system

Cancel Insurance Collection Disbursement Request

Step 3: Post new premium in SAP Customer Billing system

Create Insurance Collection Disbursement Request as Bulk


(Back to ES Bundle - Table of Contents )

Use Case 3 - Monthly Renewal for Portfolio of Policies

A Policy Management system calculates the renewal premiums for the portfolio of policies monthly. The new premiums are sent to the SAP Collections and Disbursements system with at least one Create Insurance Collection Disbursement Request as Bulk enterprise service. To process the renewal premiums for 50,000 policies in parallel, the Policy Management system can split the data into blocks of 10,000 policies and send the premiums with five Create Insurance Collection Disbursement Request as Bulk enterprise services to the SAP Collections and Disbursements system.


Step

Enterprise Service Invoked

Step 1: Process monthly renewal of premiums in Policy Management system

(No enterprise service is invoked during this step)

Step 2: Split data for parallelized processing in Policy Management system

(No enterprise service is invoked during this step)

Step 3: Post renewal premiums in SAP Customer Billing system

Create Insurance Collection Disbursement Request as Bulk


(Back to ES Bundle - Table of Contents )

Use Case 4 - Posting of a Claim Payment

An insurance customer has caused a car accident. He contacts his insurance agent who files a claim on his behalf.

After clarifying if the claimant was covered during the claim period (see Use Case Check Benefit Free Period) the claim adjuster releases the claim payment.

The Create Insurance Collection Disbursement Request as Bulk enterprise service send this information automatically to the Customer Billing and Payments application. The necessary master data shown below is created:

  • Insurance business partner role 'contract partner - MKK' for existing SAP Business Partner
  • Payment details such as credit card or bank account details
  • Standardized insurance object with default values and respective contract account via contract account creating variants
  • Payment plan items with a specific type and only one-time payments

Step

Enterprise Service Invoked

Step 1: Capture claim in the Claims Management system

Create Insurance Claim Notification

Step 2: Verify entitlement to claim in the Claims Management system

Check Benefit Free Period

Step 3: Release claim payment in the Claims Management system

(No enterprise service is invoked during this step)

Step 4: Post claim payment in SAP Customer Billing system

Create Insurance Collection Disbursement Request as Bulk


(Back to ES Bundle - Table of Contents )

Use Case 5 - Notification about Dunning

When an insurance customer does not pay his open and overdue premiums for his insurance policies, the insurance company duns overdue receivables.

SAP Customer Billing and Payments has dunning functionalities designed to remind customers to pay their debts. If the customer does not do this, dunning activities such as sending dunning notices/reminders, sending a qualified dunning notice that invites the payment via an ultimatum, and so on can be executed.

If a customer does not pay his premiums, this has profound implications for his insurance policies. For this reason, when a customer reaches a certain dunning level SAP Collections and Disbursements (FS-CD) informs other applications, for example, the Policy Management application with Notify of Insurance Dunning Progression enterprise service, which uses the Insurance Dunning Progression business object. This service passes the dunning progression information to other applications systems, so that further measures can be taken, for example, the possibility of a policy cancellation in the Policy Management system.

If the customer pays his bill in the meantime, SAP Collections and Disbursements invokes the Notify of Insurance Dunning Progression enterprise service again so that the Policy Management system is aware that the customer's account is once again in good standing and the dunning procedure has ended.


Step

Enterprise Service Invoked

Step 1: Activate automatically dunning for overdue items in SAP Collections and Disbursements

(No enterprise service is invoked during this step)

Step 2: Inform Policy Management system about a specific dunning level

Notify of Insurance Dunning Progression

Step 3: Process payment in SAP Collections and Disbursements that clears overdue items

(No enterprise service is invoked during this step)

Step 4: Close dunning and inform a Policy Management that dunning procedure has ended

Notify of Insurance Dunning Progression


(Back to ES Bundle - Table of Contents )

Use Case 6 - Searching for Customer Dunning History

A customer did not pay his premium on time and has received a reminder to pay it.
As the customer does not know his exact situation, he contacts his insurance company and asks the insurance clerk to provide him with some information.

The insurance clerk can obtain detailed information on the customer's dunning history (dunning procedure, dunning steps, dunning notices) by using three different enterprise services invoked in the Policy Management system:

  • Find Insurance Dunning Progression by Basic Data,
  • Read Dunning Notice, and
  • Find Dunning Notice By Business Partner enterprise services,

The first dunning service has been created especially for the Insurance industry and uses the Insurance Dunning Progression business object, whereas the other two use the Contract Account Receivables Payables Dunning Notice from Contract Accounts Receivables and Payables (FI-CA) business object.

Step

Enterprise Service Invoked

Step 1: Call from customer to get detailed information on his dunning situation

(No enterprise service is invoked during this step)

Step 2: Check performed by the insurance clerk to obtain the customer's dunning history from
SAP Collections and Disbursements system

Find Insurance Dunning Progression by Basic Data
Read Dunning Notice
Find Dunning Notice By Business Partner

Step 3: Inform customer about specific dunning step

(No enterprise service is invoked during this step)


(Back to ES Bundle - Table of Contents )

Use Case 7 - Searching for Account Balance Information

Operational insurance systems need to be informed about account balances in SAP Customer Billing.

If a customer calls his insurance company and wants information about his due premiums, this information will have to be retrieved indirectly from the SAP Customer Billing system and traceable in other insurance applications such as Policy Management administration systems. These need to be informed about all open and cleared premiums as well as possible claims / disbursements.

An insurance clerk can choose multiple selection parameters in order to perform a query that provides him with the required account balance information, for example, the open premiums a customer has in a specific period. The following criteria can be used for the query:

  • Business partner
  • Contract account
  • Contract (insurance object)
  • Company code
  • Posting date
  • Billing period
  • Clearing status code (open/cleared items)
  • Maximum and minimum due date

The Find Item BTD Reference by Base BTD Reference enterprise service reads references for specific receivables and payables.
The Find Item BTD Reference by Insurance Collection Disbursement Request enterprise service is specific for the insurance industry and it is based on the Insurance Collection Disbursement Request business object.

Step

Enterprise Service Invoked

Step 1: Search for information on due items in account balance

Find Contract Account Split Item Group By Elements

Step 2a: Search for Insurance Collection Disbursement Request information for the documents in Step 1

Find Item BTD Reference By Base BTD Reference
Read Insurance Collection Disbursement Request

Step 2b: Search for Insurance Collection Disbursement Request information and relationship for documents in Step 1

Find Insurance Collection Disbursement Request By Transaction Document Reference
Find Item BTD Reference by Insurance Collection Disbursement Request

Step 3: Communicate information to the insurance customer

(No enterprise service is invoked during this step)

(Back to ES Bundle - Table of Contents )

Use Case 8 - Notification about Clearing Status


Information Required by Policy Management Application

An insurance customer has a life insurance based on investment bonds. This means that as soon as the premium is paid to the insurance company, the amount will be invested in investment bonds. Therefore whenever a premium payment is made and the corresponding items are cleared, the fund manager receives the information automatically in the Policy Management system. This happens by means of the Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk enterprise service. Basically it sends an automatic notification to the Policy Management application as soon as the open item is cleared in the SAP Customer Billing and Payments system.

In order for the Policy Management system to obtain all the relevant details through a notification, it is necessary that a sign up has been performed previously with the Request Register Reference Subscription enterprise service.

The subscriptions can be done at contract account level or at Insurance Collection Disbursement Request (ICDR).

Step

Enterprise Service Invoked

Step 1: Post premium in SAP Collections and Disbursements system

Create Insurance Collection Disbursement Request as Bulk

Step 2: Subscribe to premium from Step 1 in the Policy Management system

Request Register Reference Subscription

Step 3: Clear incoming payment against premium in SAP Collections and Disbursements system

(No enterprise service is invoked during this step)

Step 4: Send notification to Policy Management system about subscribed premium

Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk

Step 5: Invest payment in bonds

(No enterprise service is invoked during this step)


Information Required by Claims Management Application
An insurance agent has filed a claim for his customer and it will be paid out to the insurance customer.

Before the insurance agent can close the claim he has to make sure that the claim is cleared. He obtains this information automatically via the Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk enterprise service, which sends a notification to the Claims Management system whenever the items are cleared in FS-CD system.

In order to receive this notification in the Claims Management system, the agent has to sign up for this information through the Request Register Reference Subscription enterprise service.

Step

Enterprise Service Invoked

Step 1: Post claim payment in SAP Customer Billing system

Create Insurance Collection Disbursement Request as Bulk

Step 2: Subscribe to claim from Step 1 in the Claims Management system

Request Register Reference Subscription

Step 3: Clear incoming payment against premium in SAP Collections and Disbursements system

(No enterprise service is invoked during this step)

Step 4: Send notification to Claims Management system about subscribed premium

Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk

Step 5: Close claim in Claims Management system

(no enterprise service is invoked during this step)


Information Required by Commissions Management Application

A broker would like to calculate his commission based on the policies he has sold in the last week.

The calculation of a broker's commissions is triggered in the Commissions Management application. The commission depends on the premiums paid by the insurance customers. It is therefore essential that the Commissions Management system is up-to-date with regard to the total or partial premium clearing information.

The SAP Collections and Disbursements system ensures that the Commissions Management application automatically receives the information about the paid premiums. The notification sent to the Commissions Management system concerning the clearings takes place via the Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk enterprise service.

It is necessary that the relevant premiums have been selected previously with the Request Register Reference Subscription enterprise service.

Step

Enterprise Service Invoked

Step 1: Create insurance contract in Policy Management system

(No enterprise service is invoked during this step)

Step 2: Calculate premium in Policy Management system

(No enterprise service is invoked during this step)

Step 3: Post premium in SAP Collections and Disbursements system

Create Insurance Collection Disbursement Request as Bulk

Step 4: Create commission case in Commissions Management system with reference to
premium from Step 3

(No enterprise service is invoked during this step)

Step 5: Subscribe to premium from Step 3 in Commissions Management system

Request Register Reference Subscription

Step 6: Clear incoming payment against premium in SAP Collections and Disbursements system

(No enterprise service is invoked during this step)

Step 7: Send notification to Commissions Management system about subscribed premium

Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk

Step 8: Calculate commission based on the cleared premium

(No enterprise service is invoked during this step)

Step 9: Post commission in SAP Collections and Disbursements system

Create Insurance Collection Disbursement Request as Bulk


Furthermore, Notify of Contract Account Receivables Payables Register Subscribed Item as Bulk enterprise service sends notifications whenever a clearing reset has taken place in the SAP Collections and Disbursements system.


(Back to ES Bundle - Table of Contents )

Use Case 9 - Verification of Benefit Free Period

An insurance customer has been involved in a car accident with his new car. He skidded on the ice into another car and both cars were damaged.

He calls his insurance agent who files a claim on his behalf. Before paying his claim, the clerk running the claims handling system invokes the Check Benefit Free Period enterprise service.

Running this check, the clerk discovers that the claimant is behind on his premium payments and, in fact, was not covered on the date of the accident. This represents a benefit exemption for the insurance company. The clerk sends out a letter to inform the customer of the situation.

Step

Enterprise Service Invoked

Step 1: Enter claim in the Claims Management system

Create Insurance Claim Notification

Step 2: Check dunning history in SAP Collections and Disbursements system

Find Insurance Dunning Progression by Basic Data
Read Dunning Notice
Find Dunning Notice By Business Partner

Step 3: Check insurance coverage for claim date in SAP Collections and Disbursements system

Check Benefit Free Period

Step 4: Inform customer about the benefit exemption

(No enterprise service is invoked during this step)


(Back to ES Bundle - Table of Contents )

Use Case 10 - Notification about Customer Initiated Payment

A customer has signed a unit-linked life insurance contract with his insurance company. He is entitled to pay an additional voluntary amount whenever he wishes.

He has received a bonus in March and he pays a specifc amount that month. After the payment is processed in SAP Customer Billing and Payments for Insurance, the application invokes the Notify of Customer Initiated Payment Received enterprise service. The Policy Management system is informed about the customer's additional payment (amount and date).

Based on this information the Policy Management system calculates the premium and carries out an endorsement that will be sent to SAP Collections and Disbursements system. This can be achieved using the Create Insurance Collection Disbursement Request as Bulk enterprise service.

Step

Enterprise Service Invoked

Step 1: Process payment in SAP Collections and Disbursements system and informs Policy Management system

Notify of Customer Initiated Payment Received

Step 2: Process endorsement and calculate premium

(No enterprise service is invoked during this step)

Step 3: Post premium in SAP Collections and Disbursements system

Create Insurance Collection Disbursement Request as Bulk

Step 4: Clear premium with the payment

(No enterprise service is invoked during this step)


(Back to ES Bundle - Table of Contents )

Use Case 11 - Notification about Insufficient Deposit Coverage

A customer has made an arrangement with his insurance company to have them debit the premium payments directly from his bank accounts (direct debit).

As the customer has had some financial trouble, this month the needed amount was not available to cover the insurance premium. If SAP Collections and Disbursements system attempts to debit the payment from the customer's account and the balance is not sufficient to cover the receivables, the system invokes the Notify Of Deposit Shortage Occurred enterprise service, which automatically informs the Policy Management system (and any other interested systems) that there is a shortage on the customer's account. The customer's premium payment is not up to date.

Step

Enterprise Service Invoked

Step 1: Trigger payment program

(No enterprise service is invoked during this step)

Step 2: Forward information to Policy Management system about insufficient deposit coverage

Notify Of Deposit Shortage Occurred

Step 3: Inform customer about the insufficient deposit coverage

(No enterprise service is invoked during this step)


(Back to ES Bundle - Table of Contents )

Use Case 12 - Notification about Payment Return

An insurance customer has agreed to pay his car insurance by direct debit every quarter. However, he forgot about the agreement he had made with his insurance company and closed his account before his premium payment was debited. He has just purchased a credit card and intends to use it for paying his premiums from that moment on.

As the premium payment could not be carried out successfully the bank sends the returns information to the insurance company in electronic form. This data is automatically transferred to the SAP Customer Billing and Payment application and saved in a returns lot. The receivables that were cleared on the basis of the incoming payment are determined and the payment clearing is then reset so that the original receivables are open again.

In this situation, the accountant that works daily with the Customer Billing and Payments application is interested in the information about the failed payment. The same happens with the insurance clerk that works with the Policy Management application. Both need to know what happened to the customer's payment, the reason it was returned and the return amount. To obtain all the information the insurance clerk requires, he has to sign up for the information by means of Request Register Reference Subscription enterprise service.

Based on this previous subscription, the Policy Management application will receive all the relevant information from the SAP Collections and Disbursements system by means of the Notify of Payment Return Occurred as a Bulk enterprise service whenever a return occurs. This enterprise service uses the Payment return business object, which contains information about the:

  • Reason for the payment return
  • Returned amount (including bank fees)
  • Payment reference
  • Bank account(s) and payment card
  • Parties involved such as insurance company, insurance customer
  • Distribution of the payment return amount to open sub ledger business partner items

The respective clerk contacts the customer and makes him aware of what has happened to his payment. The customer provides credit card data to the clerk as he intends to pay his premiums with card as of this day.

Step

Enterprise Service Invoked

Step 1: Send request to bank for direct debit payment

(No enterprise service is invoked during this step)

Step 2: Send electronically return information from bank to SAP Customer Billing application as the account has been closed

(No enterprise service is invoked during this step)

Step 3: Inform Policy Management system about payment return

Notify of Payment Return Occurred as a Bulk

Step 4: Update the bank account data and payment method in Policy Management

(No enterprise service is invoked during this step)


(Back to ES Bundle - Table of Contents )

Future Direcions

It is planned to enhance this ES bundle with enterprise services that enable the management of master data in the SAP Collections and Disbursements (FS-CD) system triggered from operational systems such as Policy Management systems, Claims Management systems, Commissions Management systems an so.


(Back to ES Bundle - Table of Contents )

System Requirements


(Back to ES Bundle - Table of Contents )

Related ES Bundles

Please take a look at other ES Bundles related to other industries that provide further details on actions related to the maintenance of business partner's types of information such as name, address, payment information, etc.

Please take a look at other ES Bundles related to other applications in the Insurance industry for further details on enterprise services related to Claims Management, Commissions Management

Please take a look at other ES Bundles related to Core Financials for more information on enterprise services that might be helpful for your business processes


(Back to ES Bundle - Table of Contents )

SOA Homepage on SDN


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