Pro Global reports that insurers implementing proactive premium audit strategies for U.S. Workers’ Compensation (WC) and General Liability (GL) claims are seeing measurable financial returns.
The company’s analysis of audits conducted for major U.S. carriers over the past 18 months indicates that effective audits can generate up to 18% in additional premium.
The firm’s aggregated audit results highlight that issues such as misclassification, underreported payroll and sales, and noncompliance with state rating bureau requirements frequently lead to premium leakage and compliance challenges. These factors can result in lost income for carriers.
Premium audits are a key process for U.S. carriers, particularly for WC and GL lines, as they ensure that exposures like payroll and classifications are reported accurately. This process is often required and is designed to make sure that final premiums reflect the actual risks insured.
“Accurate exposure reporting is the cornerstone of a sustainable insurance model, yet too often the industry accepts avoidable leakage,” said Robert Sherman (pictured above), U.S. head of audit and advisory at Pro Global.
Sherman explained that proactive, specialist-led audits not only help insurers ensure compliance and reduce disputes, but also “unlock significant additional premium.” He also noted that U.S. carriers benefit from these audits through revenue protection, fewer disputes, improved customer satisfaction, stronger regulatory compliance, and smooth integration with existing operations.
“Looking ahead to 2026, this is a clear opportunity for carriers to strengthen underwriting confidence, financial accuracy, and customer satisfaction,” Sherman said.
The broader workers’ compensation market continues to show resilience, even as net written premium for private carriers in 2024 declined by 3.2% to $41.6 billion. Despite this dip, the sector maintained a strong combined ratio of 86.1% and an operating gain of 23.7%.
Both indemnity and medical claim severity are rising, with indemnity severity outpacing wage growth and medical severity increasing more rapidly than the Workers Compensation Weighted Medical Price Index. Utilization, rather than price alone, is playing a significant role in the increase in medical severity this year.
Claim frequency in workers’ compensation continues its long-term downward trend, with a 6% decline expected for Accident Year 2024, surpassing the long-term average. More than half of this reduction is attributed to a lower number of claims, reflecting ongoing improvements in workplace safety and risk management. This trend has helped offset some of the upward pressure from claim severity, supporting the sector’s overall stability.
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