Underwriting, Compliance, and Profitability Audits
These audits focus on specific actions, results and expected business outcomes tied to regulatory or corporate requirements. These may include underwriting selection, rating rule management, risk selection consistency and documentation, loss results, automated system referral effectiveness, etc.
Process auditing is a method of analyzing business processes. Process audits for insurers may include reviews of any documented procedure. The focus of a process audit is an examination to determine whether the steps, activities and resources defined are being followed and managed effectively and efficiently. As completed by InsuranceRescue, these audits focus on specific processes rather than on people or products.
Underwriting and process audits each evaluate business requirements and identify problematic or non-compliant controls or actions. These audits are a first step leading to more focused analyses which will resolve problems, streamline practices and improve profitability.
Why should your company audit?
Regardless of a company’s financial results, audits are a critical quality control practice. Many insurance companies simply lack the necessary staff or expertise to complete a sufficient quantity of process or underwriting audits.
For an organization already facing financial challenges, auditing can identify those areas of premium leakage and establish plans and priorities for next actions.
Even well-performing companies may have underlying processes with discrepancies, hidden problems, unnecessary or missing steps, inefficiencies and other unexpected results.