Inventum Unveils New Techniques for Identifying Unreported Workers’ Comp and General Liability Exposures

Ft. Lauderdale – Inventum’s innovative Predictive Exposure Modeling®, pat. pending service has been enhanced to offer improved results to a wider array of workers’ compensation and general liability insurance carriers. Inventum developed Predictive Exposure Modeling in 2004 to help insurance companies identify the hidden unreported exposure in their workers’ compensation and general liability policies. Until recently the models were used primarily to select the most appropriate premium audit protocol, based on the likelihood that a policy had under-reported or misclassified payroll. Now the models have been enhanced to add value in other ways.

Early Warning Exposure Assessment (EWX)

Because Inventum’s models can predict which policies are likely to have hidden exposure at any time during the policy period, the company has launched the Early Warning Exposure Assessment (EWX) service. In effect, the Early Warning Assessment extends and enhances the underwriting process for new insureds by modeling these policies within a few weeks of inception and recommending early-warning audits where the likelihood of unreported exposure is high. Similar to Inventum’s post-expiration audit modeling, the results of these “underwriting audits” can significantly improve financial results, and because the policy is in force, collection rates are more favorable than with a traditional post-expiration audit program.

Physical Audit Prioritization (PAP)

Because some insurance carriers have chosen (or are required by regulation) to physically audit all or most of their policies, the targeting of post-expiration audits may have limited value. Inventum’s Physical Audit Prioritization (PAP) service is attractive for such companies because it helps to segregate those policies that require an intensive on-site review from those that can be reviewed with less intensity. According to Bill Snyder, one of Inventum’s founders, “Not all physical audits are the same, and we have found that some policies require a more intensive audit protocol than others. Using our processes, models and databases we can analyze a company’s workers’ comp or general liability book and determine the optimal characteristics of an effective physical audit, including an audit guide and detailed instructions for the auditor before he even visits the insured. This maximizes the likelihood that the company will identify all of the unreported exposure without spending a fortune on its audit program.”

Premium Audit Quality Review (AQR)

In response to concerns about the accuracy of audits performed by some 3rd party audit vendors, Inventum has established the Premium Audit Quality Review (AQR) service. As Jim Ettwein, another of Inventum’s founders, points out, “When auditors assign workers to the wrong class or improperly apply exclusions and limits, it is usually the underwriters who must unravel the problem and process the corrections.” Because Inventum’s models predict likely payroll and classification issues, when there is a discrepancy between the models and the actual audit, this is often a strong indicator of questionable audit quality. In response, Inventum has launched the Audit Quality Review (AQR) service, to manage the inventory of outstanding audits and review the quality of each audit before it is processed by the carrier. When necessary, incorrect, or low-yield audits are sent back to the vendor for rework. Inventum also reviews the audit vendors’ invoices to ensure that the company does not overpay, especially for audits requiring rework.

Inventum provides all these services on a traditional fee-for-service basis as well as an innovative gain-sharing arrangement where Inventum and the client share the benefits of the unreported exposure that the models identify.

According to Dr. Philip Pyburn, Inventum’s President, “Predictive Exposure Modeling helps our clients identify the hidden exposure that exists in every workers’ comp and GL book of business. The additional premium that results when this exposure is uncovered can be quite significant, and in a few cases accounts for 10% – 12% of the company’s total written premium.”

For more information on how Inventum can help your company, visit www.inventumcorp.com.

For more information or questions regarding this story, please contact:
Philip Pyburn
Phone: 954-847-2801
email: ppyburn@inventumcorp.com
www.inventumcorp.com

Topics Workers' Compensation New Markets