The Evolution of Insurance Premium Auditing

Insurance premium auditing has had many iterations over the years.  In the past, insurance carriers conducted audits.   Now, audits are usually done by agents that either work for or are contracted by insurance companies.  However, auditing is changing once again due to the introduction of AI.  New processes are emerging, and may help streamline auditing for companies. 

Historically, auditing often resulted in inaccurate estimates, which resulted in additional cost for the company.  If an estimate is too low, a company receives a bill for the additional premium.  If the estimate is too high, a company receives a refund.  Incorrect estimates have led to 25% to 50% of companies with insurance policies to be overcharged at some point in the auditing process.  

With this in mind, it is no wonder that insurance premium auditing has advanced over the years.  Now, AI helps auditors detect anomalies, predict trends and boost data accuracy.  It also makes the auditing process flexible, as audits can occur via video conferences, phone calls, auto paper mailings or web-based portals.  

AdvoQates is an example of a new paradigm in the auditing world.  AdvoQates’s process helps businesses save thousands or even millions of dollars.  It also improves efficiency because the auditors work for the company that is receiving the audit, rather than working for the insurance company.  

Although auditing was inefficient and costly in the past, new methods have improved the process.  Now, companies have more options to choose from when it comes to auditing services, and there are ways to reduce errors and subsequent cost.