Premium Leakage: Finding the Holes with a Second (or Third) Set of Eyes

We have some of the most talented premium auditors in the country. Auditors who have been doing this for 30 years, participate in year-round training, and excel in their field in every possible way. 

Yet we still reject 30% of their submitted audit jobs. 

Does that above-average percentage mean our premium auditors aren’t the best at what they do? Absolutely not. What it means is our department of 400+ auditors has the time and resources to be meticulous, so there is an expectation that jobs are always going to be double- and triple-checked because mistakes impact premiums. Whether your company calculates too much or too little for premiums, inaccuracies are costly. 

Top auditors come to Davies because they are in a better position to help their clients catch—and fix—problems in real-time. 

First Things First: Premium Audit  

Our team started out by providing premium audits to U.S. clients without an in-house person or team equipped to perform them the first time, let alone have a secondary quality control check.  

For this service, our auditors provide on-site, virtual, mail, remote and verified phone audits with clients, then share detailed and easy-to-understand reports. Of note: we are one of the few companies in the country with the ability to do physical audits in all 50 states. 

Branching Out: Auditing the Audits 

Even among companies that do have personnel to perform premium audits, the case for investing in additional external audit review expertise has grown. Just a few incorrect audits could cost a company more than the entire budget of their premium audit team for a week. 

Why so many potential errors in audits? It’s because the nature of the work creates subjectivity in the results. Depending on what questions are or, more importantly, aren’t asked by auditors means the value of any audit can vary widely. Further, the nature of operations differs across companies—so there’s no one-size-fits-all question list for external auditors to ask. 

Since Davies is so well known for our premium audit work, companies and carriers with in-house teams have started approaching us to review their premium audits. 

Our SecondCheck Audit Review team now mines through data, dates, records, payroll, employee classifications and more, then rates each job as Perfect, Good, Average, Below Average and Unclear. 

Based on the rating, our auditors make one of the following recommendations to the client: 

• Audit is good, process it 

• Order onsite re-audit  

• Order virtual re-audit  

• Order phone re-audit 

Having this second (or third) set of eyes ultimately helps identify the ongoing or one-off errors that are adding up. 

Signs You Might Need SecondCheck 

• Your premium calculations continue to be too high or too low 

• Your internal audit team is understaffed and overwhelmed 

• Your outsourced audit team has a consistently low rejected jobs percentage 

• You’re in a state with a Test Audit program 

Interested in discussing how SecondCheck Premium Audit Review could help your company or team? Contact Mark deWaal, Vice President – Premium Audit.