The Past, Present, and Future of Insurance Premium Auditing 

 

When your business needs help with legal issues you hire a legal expert. When your business needs help with insurance premiums, you hire an insurance premium audit expert
 

Previously, insurance premium auditing was done by the carrier

 

• The only way to determine the actual premium is to do an audit as this type of insurance is based on an estimate.

• Audits occur annually - Typically upon expiration

  • Additionally, there may be mid-term policies 90 days after the policy expiration date

• Calculated based on estimates of insurance ‘exposure’ (estimated payroll + business operations + losses/mod)

• The final premium is determined by:

  • Auditor bias

  • Actual premium basis

  • Proper classifications

  • Rates that apply to the business

• Different outcomes depending on your circumstances

  • If the estimate is too low:

    • You’ll receive a bill for the additional premium

  • If the estimate is too high:

    • You’ll receive a refund (usually a policy credit) or check

 

• The cost is high for incorrectly estimating insurance needs

  • 25-50% of business owners with workers' compensation policies may have been overcharged at some point during their audit processes

• Annual workers comp premium cost in the US: $55 - $60 billion

  • As much as 10% to 20% of premiums is lost to premium leakage

 

The way insurance premium auditing is now

 

• You’re contacted by an auditor who works or is contracted by the insurance company

• They conduct an online auditor virtual, phone, or email audit

• Auditors review records of: who works or is contracted by the insurance company

  • Payroll

    • Journal and summary

    • Individual earning records

  • Cash disbursements

    • Monthly totals by account

    • Subcontractors

  • Tax Records: Federal and State, 

    • Income Statement Reports

    • Gross Sales

    • Corporate Returns

  • Cash receipts

    • Monthly totals by source

    • Service and repair

  • Certificates of insurance

    • Workers comp

    • GL

    • Limits of Coverage 

• The carriers complete a final audit and issue a final statement and provide you a final statement

  • You only get a report if you ask for one

• Based on the result of the audit you may get a bill or credit

 

The Rise of AI in Insurance Premium Auditing

 

• Paradigm shifts

  • AI helps auditors:

    • Detect anomalies

    • Predict premium trends, impacts, and risks 

    • Improve evidence-based classification 

    • Uncover real-time business operation shifts

    • Boost data accuracy and reliability 

• Flexible visits

  • Video conferences

  • Phone calls

  • Auto paper mailings

  • Web-based portals

• Predictive analytics

  • Reduced likelihood of inaccuracies and expensive surprises

 

Enter Advoqates, a New Paradigm in the World of Insurance Premium Audits

Our insurance premium auditing process helps businesses save money thousands or even millions of dollars

 

• Advoqates represents everyone — from the small mom and pop to the huge billion dollar conglomerate

  • Everyone needs a representative, we have the experience to represent everyone no matter the industry

    • Healthcare

    • Retail

    • Sports teams

    • And beyond

• Our auditors work - for YOUR business, not for the insurance company  

What We Do for You

Advoqates takes the complexity out of insurance premium audits and puts you in control of the process

• Our expert team works tirelessly on your behalf to ensure the best possible outcomes, while staying fully compliant with state and federal regulations.

 

Here’s how we go above and beyond for our clients:

• Audit Management

  • We become the point of contact with the auditor

    • Ensuring clear communication

    • Reducing the administrative burden

    • Mitigating errors and overcharged premiums
       

• Documentation Support

  • Our team helps you gather all necessary records
     

• Data Review

  • We thoroughly analyze all documentation and classifications to uncover opportunities for cost savings

    • Experienced auditors actively identify deductions and exemptions to ensure your insurance bill is accurate to the dollar
       

• Submission and Response Preparedness

  • We compile all your data into our audit software

    • Complete a thorough audit

    • Submit it to the auditor along with the original records

    • Potential questions are addressed preemptively within the report
       

• Alignment and Resolution

  • We engage directly with the auditor to confirm that everything aligns with the report we submitted and address any discrepancies or concerns

 

Whether the audit results in a bill or a credit, we make sure it is accurate, justified, and reflects the actual exposure. You’ll never pay more than you owe—GUARANTEED.

 

 

Why Choose AdvoQates?

• We don’t just represent you; we guide you.

• Designed to ensure fairness, compliance, and savings.

• With us, you can rest assured that your audit is handled with precision and care.

 

Simplify the insurance premium auditing process by letting AdvoQates handle the entire auditing process directly with the carrier.

 

Sources

advoqates.com

swissre.com/reinsurance/insights/state-of-us-workers-compensation.html

workcompconsultant.com/top-ten-list-of-workers-compensation-audit-errors

eforum.casact.org/article/72755-forecasting-audit-premiums-the-role-of-the-actuary

ncci.com/Articles/Pages/AU_SOTL-Report-Metrics-Show-Strength-of-WorkersComp.aspx

kpmg.com/au/en/home/insights/2024/05/ai-transforming-auditing-and-financial-reporting.html

verisk.com/4ae1ef/siteassets/media/campaigns/gated/underwriting/verisk-the-challenge-of-auto-insurance-premium-leakage.pdf