CINCINNATI, OH--(Marketwired - Aug 7, 2014) - Ward Group, an Aon Hewitt company and the leading provider of benchmarking and best practices research studies for the insurance industry, today released findings from its study of premium audit practices at property-casualty commercial lines carriers. The study examined the structure and performance of premium audit operations amidst the growth of direct premiums written in U.S. commercial lines. A diverse group of 38 companies participated in the research and results showed a noticeable increase in executive level focus on premium audit practices over the past three years.
"Given the increase in direct premiums written in the commercial lines market, company leaders are looking more closely at the efficiency of their premium audit practices to find opportunity to improve profitability," noted Jeff Rieder, partner and head of Ward Group. "The benchmark comparisons and insight into premium audit practices available in the study will help companies more effectively evaluate their premium audit operations."
The study analyzed staffing for premium audit functions as well as cost, frequency, type and resources used to conduct premium audits. Participants in the study reported an average of 1.7 percent net additional commercial lines premium identified as result of the premium audit process in 2013. According to the study, nearly half of participants plan to increase the number of physical audits conducted in 2014 and that the increased workload and staffing are the primary challenges faced by premium audit operations.
The study results include benchmarks segmented for workers' compensation, multi-line commercial writers and by account size. Mono-line workers' compensation carriers in the study spend 80 percent more on premium audit than multi-line commercial carriers. Additionally, workers' compensation carriers conduct 93 percent more audits and rely more heavily on physical audits. Large account carriers also rely more heavily on physical audits at a cost that is 60 percent more than physical audits at smaller account carriers. The larger exposure base for large accounts provides cost justification for the difference in frequency compared to small accounts carriers. Other notable observations from the study include:
- Online audits are conducted more frequently by mono-line workers' compensation carriers
- Better mail and online audit accuracy and completion rates achieved by the mono-line workers' compensation carriers
- Multi-line carriers were more likely to maintain or increase their reliance on vendors
- Multi-line carriers were less successful implementing payroll reporting
For more information or to purchase a copy of results for the Premium Audit Practices Study, visit the firm's website at www.wardinc.com.
About Ward Group
Ward Group, a McLagan/Aon Hewitt company, is the leading provider of benchmarking and best practices studies for insurance companies. The firm analyzes staff levels, compensation, expenses and business practices for all areas of insurance company operations and helps companies to measure results, optimize performance and improve profitability. For more information about Ward Group and the Ward Research Center, visit www.wardinc.com.
About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit www.aonhewitt.com.
Contact Information:
Ward Group Media Contact:
Betty Cornelius
Ward Group