This article was created in partnership with Applied Systems.
For decades, insurance accounting has been defined by complexity, fragmentation and a staggering amount of administrative overhead. In 2025, AI is rewriting the rules of the game. Research from Conning found that 77% of sector professionals are in some stage of adopting AI in their value chain. But what does that mean for agencies and their commissions? How will AI ultimately upgrade the current system and what role will humans play in the future of the market?
Speaking to Insurance Business, Chase Petrey, president of Applied Pay at Applied Systems, explained that AI-powered reconciliation is turning traditional pain points into high-efficiency, value-driven opportunities. And it’s not stopping there.
“The crux of it is, if I'm an agency, I'm writing business with a bunch of different carriers,” Petrey began. “Each one of those carriers gives them their commission information in different formats. Travelers might give me my commission data in Excel, Chubb might send me a PDF, another might send a physical piece of mail.”
This lack of standardization forces agencies, whether boutique firms or publicly traded giants, to manually input line-by-line commissions into their accounting systems.
“That may not sound like a huge deal,” Petrey told IB, “but if you think about benefits policies - the commission back to the agency for a dental policy for myself might be only $5 that month.”
When those statements arrive monthly, across hundreds of carriers, for thousands of individual policies, the task becomes monumental – not to mention pricey.
“The cost of going and entering that into the accounting system sometimes is as much as the commission is for that month,” added Petrey.
Applied’s AI solution, Applied Recon natively integrated in its agency management system Applied Epic, is engineered to solve this inefficiency. The agency can upload all of the statements into their AI engine and extract all that information regardless of the format.
“The AI does all of the calculations for [the agency], and then it goes and updates the accounting system [too],” explained Petrey.
But AI’s benefits don’t just lay in its automation, the tool is fundamentally more accurate, especially in high-volume, low-value environments.
“There’s an accuracy issue when you have a very monotonous task that a human's doing over and over,” Petrey told IB. “Commissions are very important, because that's how you pay your employees. There’s a broad sentiment in the industry that producers don’t trust their commission data. Our models, however, are now producing 99%+ accuracy - which is much higher than human accuracy at this point.”
And with commissions, just like with payroll, accuracy is a prerequisite. After all, a person may forgive an employer many things – they won’t forgive, or forget, being underpaid. As Petrey went on to tell IB, for large agencies investing in the AI-led approach the payoff is enormous overall. And while the narrative around AI often sparks fears of job displacement, Petrey offers a more nuanced view.
“Rather than replacing the teams, [AI is] allowing the teams to do more.”
Because by automating monotonous administrative things, it’s taking cost out of administration overhead. And AI’s benefits here really are outmatched here too - faster book closures, self-auditing, the freedom to refocus towards financial optimization and strategic planning.
“Insurance accounting is going to go up more from administration into value add,” added Petrey. “Right now, a good chunk of insurance accounting is just pecking away at a keyboard. [Now], you can start getting a lot more sophisticated on true finance – [looking at] how can I optimize my cash flow? How can I optimize my float on interest rate?”
Here, Petrey outlined two billing models, direct bill and agency bill, that illustrate the full potential.
“In an agency bill, when I collect full payment as the agency and then I pay the carrier. What we’re able to do is automate all this and then tell the agency how long they can hold the cash in their bank account before having to pay the commission.”
And that’s no small benefit. As Petery tells IB this is “super high value,” going from “administration work to value-add work, where I’m making the agency more money.”
From a personal standpoint, Petrey has already seen some seismic shifts over his relatively short tenure in the sector. As he told IB, the questions he was asked three years ago were all around admin – now they’re hyper focused on cashflow.
“[The change] is going to be exponential. You can see it on a quarterly basis… all because AI is automating all the administration out of this process.”
This compounding effect means that even mid-sized agencies, those with a few dozen employees, are experiencing measurable returns from AI adoption. And as models grow smarter with every statement processed, the momentum is only accelerating.
However, AI isn’t a panacea for all the sector’s ailments – and it can never be used blindly. The human touch is, even if reduced, still incredibly important. As Petrey sees it, AI is not about removing the human from the loop – rather it’s about elevating the human’s role.
“You still need a human on the money,” he added. “What that human is going to be doing is optimizing cash flow, optimizing comp plans, optimizing rates with the carriers.”
What Applied has engineered is not simply a smarter accounting tool here - it’s a new financial operating system for agencies, one that promises faster payments, greater accuracy, lower administrative costs, and higher strategic capability.
“I’m happy to spend a lot of money on work that makes me money,” Petrey added. “I’m not happy to spend a lot of money on work that is just administrative.”
