Over the years, insurance premium auditing has changed drastically. This change has led to improvements, especially when it comes to reducing excess expenses.
Initially, insurance premium auditing was done by the insurance carrier. Auditors would calculate insurance premiums based on estimates of insurance exposure. Factors such as auditor bias, proper classifications, and actual premium bias also impacted the final premium. Unfortunately, these estimates were often inaccurate, leading to high business costs.
Today, it is more common that auditing is conducted by an auditor who works for or is contracted by an insurance company. This auditor reaches out to a company to offer services. To conduct an audit, auditors review various records, such as payroll, cash reimbursements, and tax records. With this information, the auditor pieces together a final report that determines whether the company receives a bill or a credit.
Even more changes are on the horizon when it comes to insurance premium auditing. AI is having sweeping impacts on the auditing process, introducing increased flexibility and reliability. AI helps auditors to identify anomalies, uncover real-time business operation shifts, and boost data accuracy. This can cut down on costs for businesses, making AI auditing an appealing option.
Companies like AdvoQate are striving to streamline the auditing process, marking a new era in insurance premium auditing. The process has already changed significantly and will continue to improve moving forward.