Protecting Your Insurance Agency from Fraud

Independent insurance agencies are trusted to protect what matters most. At the same time, customers, employees, and business partners depend on agencies to handle sensitive information and financial transactions securely.

Cybercriminals increasingly use phishing, compromised email accounts, altered checks, and fraudulent payment instructions to redirect funds. A single incident can cause significant financial loss, disrupt operations, and damage an agency's reputation. Fortunately, agencies can reduce their exposure by combining attentive internal procedures with the right treasury management tools.

Slow Down and Verify Payment Changes

In a world where urgency is often rewarded, it is important to slow down and question unexpected communications, especially requests to change payment instructions.

Even when the request looks legitimate, never rely on the email alone. Call the organization using a trusted phone number already in your records-not one included in the change request. Speak with a known contact and confirm both the request and the new payment information.

This additional step is especially important when a message creates urgency or pressures an employee to act immediately. Fraudsters count on people moving quickly. Taking a few minutes to verify a request can prevent a costly transfer to a criminal's account.

Review Account Activity Every Day

Detecting fraud quickly may greatly improve the likelihood that funds will be recovered. Depending on the transaction and applicable account agreements, businesses may have a very short period to identify an unauthorized transaction and begin the dispute process with their financial institution.

After that initial period, the financial institution can still investigate and work with the institution that received or cashed the funds, but recovery may not be guaranteed.

Employees should also be sure to examine more than the check number and dollar amount. Check-washing schemes may leave those details unchanged while replacing the original payee's name.

Use Positive Pay to Help Stop Check Fraud

Positive Pay provides another layer of protection by allowing an agency to verify checks before questionable items are paid. This too is so effective in preventing fraud that SFB provides it free of charges to all its clients.

When an agency issues checks, it uploads or manually enters its check register through its online banking platform. As checks are presented for payment, the bank compares each one against the agency's register, including the check number, issue date, amount, and payee.If information does not match, the check becomes an exception. The agency is notified and can review the item before deciding whether it should be paid or returned.

This process can help identify altered amounts, unauthorized payees, duplicate checks, and counterfeit items before they affect the agency's bottom line.

Control Unauthorized ACH Transactions

ACH filtering can help agencies control which companies are permitted to debit their accounts.

With an ACH filtering service, the agency provides a list of approved ACH originators. Incoming ACH transactions are compared against that list. If a transaction comes from an organization that has not been approved, the agency is notified and asked to review it.

Used together, Positive Pay and ACH filtering can give agencies greater visibility and control over both check and electronic transactions.

A Financial Partner That Understands Insurance Agencies

SFB has developed an Insurance Agency Financing Team dedicated to serving the needs of insurance agencies. That specialized perspective allows SFB to bring agency financing and treasury management together, helping independent agents pursue their growth and succession goals while putting practical safeguards around their daily financial activity.

Whether your agency is preparing for an acquisition, planning for ownership transition, investing in future growth, or looking for stronger cash management controls, choosing a financial partner that understands the insurance industry can make a meaningful difference.

Talk with SFB's Insurance Agency Team to learn how customized agency financing and cash management services can support and help protect your independent insurance agency. Schedule an appointment today.