When a company needs help with insurance premiums, it hires a specialized auditor. Historically, this took the form of the insurance carrier performing the audit. In the past, audits typically happened once a year, although there may be mid-term audits 90 days after the policy expiration date.
However, this form of auditing often resulted in high costs for businesses. Auditors calculated premiums based on estimates of insurance exposure, but these estimates were often incorrect, which led to companies being overcharged. With this in mind, the auditing process had to be streamlined and has since evolved into something more efficient.
Insurance premium auditing transitioned to a format in which an auditor whom the insurance company contracts reaches out to the business. The auditor conducts an online, phone, or email audit. Once the audit is complete, the carriers issue a final statement, and the company receives either a bill or a credit.
While this has improved the auditing process, there are more advancements to be made. AI is on the rise in insurance premium auditing and offers benefits that address some of the longstanding problems with auditing. For example, AI allows for increased flexibility and a reduced likelihood of inaccuracies.
Over the years, the way insurance audits are conducted has changed. New companies are implementing AI to help businesses save money in audits, which has improved the overall process.
