Are Your Final Premium Calculations Piling Up? We Can Help.

If you’re an insurance carrier struggling to keep up with premium audits while juggling underwriting deadlines, you’re not alone. Across the country, it’s the same challenge: how to process audits quickly and accurately without draining internal resources—especially during your renewal season.

Not processing final premium calculations and notifications on a timely basis can be a huge hit to both company profitability and customer experience.

For example: say your team audited a policyholder two years ago, but no updated calculations have been run or sent to them yet. If the policyholder underpaid on their premium, you’d eventually be sending them an unexpected bill to recoup your expenses 2+ years after the time frame had passed—not an ideal policyholder experience. And if they overpaid on their premium, you’d owe them a refund—an expenditure that wouldn’t have been accounted for in your current budget cycle. Either way, you suffer from a lack of real-time premium dollar figures.

When carriers are dealing with this situation in bulk, it can significantly impact their current bottom line in either direction. Timely processing is crucial.

But your team doesn’t have to spin its wheels on final premium calculations.

Since this isn’t a customer-facing process, it’s ideal to outsource so you can free up your teams for value-add services during renewal season or year-round.

—Related Content: Find out more about our Premium Audit technology and tools—

How does the Premium Audit & Calculation process work?

Step 1: Initial Estimate. When a policy is issued, the insurer calculates an estimated premium based on projected exposure units (e.g., payroll, revenue, number of employees).

Step 2: Audit After Policy Term. At the end of the policy period, the insurer conducts an audit to verify actual figures: payroll records, sales reports, subcontractor costs, employee classifications, etc.

Step 3: Recalculation of Premium. The actual exposure is multiplied by the applicable rate per unit (e.g., rate per $100 of payroll for workers’ comp).

Step 4: Adjustments. If actual exposure is higher than estimated, the insured owes additional premium. If it’s lower, they may receive a refund.

Step 5: Notifications. If any adjustments need to be made, audit staff needs to provide notifications, worksheets and invoices.

Davies’ Premium Audit Team can handle the Audit After Policy Term, and our Final Premium Calculations team can step in to handle Recalculation of Premiums, Adjustments and Notifications.

So if Davies already conducts your Premium Audits, they can continue the entire process for you with a Premium Calculations add-on.

Likewise, if you started with Premium Audit Calculations and eventually wanted to involve our team earlier in the process, you could do a Premium Audit add-on.

How our Final Premium Calculation specialists help

We can get carriers caught up on backlogs quickly and/or help them stay current year-round.

Our specialists are trained to work with your audit and underwriting departments, helping to increase your profitability by lowering the cost—both in dollars and delay—of your internal underwriting function and processes.

We work with you to determine your project parameters, deadlines, and any native systems you would like us to use. We do not modify or recalculate the audits provided—we process them as-is to determine final premiums.

Our team serves clients in all 50 states, with the ability to do physical on-site audits across the country.

Ready to make premium audits less stressful and more efficient for your team? Contact us.