Insurance premium auditing ensures that businesses pay the appropriate rates based on their actual risk exposure. In order to verify the level of risk exposure, audits consider factors such as payroll, business operations, and losses. There may be overestimates or underestimates because this method is ultimately dependent on estimation. However, prediction errors can be costly; businesses are required to pay for the additional premium if they have been undercharged. On the contrary, overcharging premiums has also affected 25-50% of business owners who hold insurance policies at some point.
The auditing process is usually very meticulous. An auditor will review a company’s records, such as payroll logs, tax records, cash disbursements, and insurance certificates, in order to verify their risk exposure. This stage of the process can be completed over several avenues, including by email, website, or by the phone. AI can streamline this process for each of these methods and ensure the overall reliability of the collected data. For instance, AI can use predictive analytics to identify anomalies and forecast trends, impacts, and risks. It can also uncover real time business operation shifts and improve evidence-based classification. The successful application of AI can help businesses save millions of dollars.
