Remote audits – what lessons have been learned so far?.

Pervin Sivanathan, Head of Insurance Consulting Operations, discusses how the world of audits has evolved over the last year, and what challenges and opportunities this new era of remote working brings

Audits can be an effective way for insurers to have oversight of the delegated outsourcing arrangements (Coverholders & DCAs/TPAs.) The pandemic has shown us that remote audits are possible, but that they come with their own challenges. In theory, the fundamentals haven’t changed: audits are still conducted in real-time, and they still require planning and preparation, followed by high quality reporting and a clear set of actions.

 

Ideally Coverholders / DCAs / TPAs will provide read-only access to their systems during a remote audit to ensure that the file review process runs as smoothly as possible. Having encountered issues with multi factor authentication and having to navigate unfamiliar systems however, this is not without issues. Where systems access is not possible, Coverholders will instead upload documentation onto a portal.  Invariably missing data or incomplete file structures result in the reviews taking longer than if we were onsite.

 

Demonstrating value

Despite these challenges, remote audits offer opportunities; the most recognisable being the ability to audit without having to travel. For clients, this new way of working has brought about more than just flexibility, it has saved travel time and costs.

 

But the advantages don’t stop there. By making remote audits as efficient as possible, Coverholders can demonstrate the value they add to their underwriting partners; and, with this new era upon us, adding value has never been more important. Only because an audit is remote doesn’t mean the work is any less stringent. Insurance audits still require the Coverholder to have all their protocols in place; from preparing documents to briefing individuals for interview purposes. In short, by Coverholders getting all their ducks in a row, they can save time – and therefore costs – for their partners.

 

Process is king

 

The preparation and pre-audit process is central to the remote audit process to ensure auditors have access to the right people at the right time and all data / answers to queries are provided in a timely manner. Therefore, strong communications and project management are key to a successful audit, preferably with all stakeholders having a designated contact throughout the audit process.

 

The use of online secure data portals and video technology again facilitates the sharing of data and helps build trust during the audit process.  Whilst video technology can’t wholly replace onsite interviews (as auditors are unable to fully pick up on the softer cues or assess physical office environments), it is definitely more effective than undertaking telephone interviews.  We have also used video technology to file share with Coverholders if system access is not available.

 

Post pandemic

 

We believe that even in a post Covid-19 world, the majority of audits will continue to be conducted remotely, with the market moving to an onsite/ remote hybrid approach.

 

Of course, much will depend though on the individual characteristics of the Binding Authority such as the class of business, limit size, the amount of premium being written, profitability and whether Underwriters have any issues or concerns with the way in which the Coverholder are managing the facility.

 

Covid has certainly fast tracked the advent of greater home working and this particular sector of the insurance industry is well suited to taking full advantage of improvements in technology and streamlined data flows to benefit from the efficiency gains that remote audits bring.