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What Does a Premium Auditor Do?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 26 June 2014
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A premium auditor generally works on high dollar projections for insurance risk in order to help an insurance company, or other employer, to manage these risks. Some financial experts define premiums as payouts involved in some kinds of customer transactions. In the insurance industry, the premium is most usually defined as the payment made to an insurance company in exchange for coverage of risk. Premium auditors generally assist in valuing premiums, and otherwise assessing risk and liability for the company offering the insurance policy or product.

As a specialized kind of finance professional, the work of a premium auditor is critical for making sure that premiums are in line with top-level risk projections for a set of policies or insurance products. To assure that premiums are set correctly, and that insurance projects are well calibrated for profits, premium auditors typically engage in field auditing, resolving audit questions and otherwise maintaining audits. Premium auditors often work closely with underwriting departments to make sure that the right initiatives are taken to assess risk and liability. They may also work with loss prevention departments or other internal teams.

Aside from their technical duties, premium auditor professionals may be part of the face of an insurance company. They may be asked to represent the company in various scenarios or situations. One of these is as a facilitator in bringing loss control or prevention departments up to speed on field research, or on how insurance policies or products are actually used.

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In general, premium auditors research each individual policy to find out whether the payment corresponds to the risk undertaken by the company. This is done for small individual policies, as well as larger financial policies, for example, where an insurance company underwrites risk for a financial product. All sorts of insurance policies and premiums require professional premium auditing and assessment, and these individuals are integral parts of a valuation team for a company selling insurance or otherwise involved in this field.

In addition to the above, the premium auditor might sometimes have some sorts of tasks or duties related to human resources, recruiting, or training. These professionals may train beginners after they have proven themselves as competent auditors, or engage in staff meetings over the strategy for adding new auditors to an existing team. These kinds of administrative roles are usually secondary to the work that premium auditors do in the field, where close inspection of premiums, underwriting methods, and demographic or real-time data help to show whether an insurance policy, product, or initiative will thrive.

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