Although it may not be discussed as frequently as claims in commercial insurance, a negative premium audit experience can be just as likely as a poor claims experience to cause policyholders to switch insurers.

That can be a problem for insurers whose premium audit practices contribute to declining client satisfaction.

What can go wrong?

Many premium audits can take months to complete due to inefficient processes and procedures. Therefore, it may take a long time for clients to learn that they owe more money because their risk was underestimated, or they are due a refund because too much premium was collected.

That’s where a specialist AI assistant comes in, providing a technology solution that streamlines one of the most time-consuming tasks of the premium audit process: data collection and validation.

Data Collection Takes Time

Premium audits play a critical role in ensuring insurance companies accurately assess risk and set appropriate premium payments. The audits provide insights into insureds’ operations, allowing insurers to adjust policies accordingly.

Timeliness is crucial. If an insured’s business has undergone significant evolution, identifying changes promptly enables underwriters to make necessary adjustments to policies already in force rather than at a future renewal. Moreover, collecting additional premium within 30 days of policy expiration is far easier than attempting to collect six months later, when policyholders may have already moved on.

However, most premium audits rely heavily on manual processes for data collection and validation. Auditors may need to review a file 10 or 15 times as it is exchanged back and forth with insureds to collect the necessary information. Once auditors have the information, they must then convert the results into specific formats, such as inputting data from a PDF into an Excel spreadsheet. This process often relies on manual data entry, which can take hours for large business clients with extensive information and increases the likelihood of errors and omissions.

Enter AI Assistants

Agentic AI, in the form of autonomous, persona-based AI assistants, can remove many manual processes from premium audit workflows. Such cognitive digital co-workers can assume distinct roles and continuously learn and adapt to evolving audit requirements in real time.

AI assistants can ingest relevant state regulatory guidelines. They can then be trained to review incoming information from an insured, apply those guidelines to the files, and flag any submissions that are incomplete or inaccurate.

They can also analyze the submitted records, compare them to policy details and verify the accuracy of the information. If the AI assistants encounter files with missing information or discrepancies between the submitted information and the policy details, they can notify auditors to follow up with the insured.

The AI assistants can help the premium audit team tailor the information collection to their policyholders’ needs. Instead of using a standard data collection form where certain questions might not apply to all insureds, the AI assistants can personalize audit questions based on the business classification, prompting insureds to provide relevant and accurate data.

For example, the AI assistants can request construction companies to furnish a list of subcontractors, along with payment details and certificates of insurance. They can ask restaurant owners to define their delivery service providers, such as Uber Eats or employees providing delivery.

Once the records are received, the AI assistants can extract more precise data from the documents and standardize information into consistent formats. Auditors will no longer have to transfer data from incompatible formats and then integrate details into internal systems. The assistants can automate the entire process, ensuring consistency and accuracy across audits. This also streamlines auditor workflows, as some auditors may not possess the same skills (e.g., in Excel) as others.

Training and Security

To consolidate premium audit processes, insurers can adjust their workflows for the agentic AI technology to work in conjunction with company auditors. AI assistants are similar to digital interns at the outset of their deployment. It’s best to start with simple tasks, such as reviewing a submission and flagging missing information. After these processes are mastered, the AI assistants can be further trained to take on and excel in executing more complex tasks. Working with AI assistants is not a generic plug-and-play process, as they can be trained to complete tasks based on the company’s current and future procedures.

Another area to consider is the security of agentic AI solutions. Insurers are seeking and considering solutions that integrate directly into their own ecosystems, rather than relying on cloud-based services. This helps to keep sensitive data secure and makes it easier to maintain compliance standards and data integrity.

As the insurance industry continues to evolve, leveraging AI-powered assistants will become essential for improving efficiency, accuracy and policyholder satisfaction. By reducing manual touchpoints, streamlining data collection, and ensuring consistency in premium audit analysis and processing, commercial insurers can clear the path for their auditors to focus on classifying and evaluating risk and exposure factors—in the context of often complex policy details.

It’s not a question of whether to adopt agentic AI but rather how quickly to implement AI assistants for competitive advantage. Insurers that embrace this transformation will be well-positioned to enhance underwriting and premium audit accuracy, improve operational efficiency, and deliver superior policyholder services.