Pros and Cons of Becoming an Insurance Auditor
Insurance auditors review documents such as tax returns, general ledgers, payroll records and financial statements to ensure that a business is paying the appropriate amount in insurance, including worker's compensation and liability insurance. Read on to learn more about the pros and cons of becoming an insurance auditor.
| PROS of Becoming an Insurance Auditor |
|---|
| Certifications available to advance career* |
| Above-average earning potential with experience and education ($43,000-$81,000 salary range for senior auditors in 2015)*** |
| Wide range of education qualifications (on-the-job work experience, associate's degree, bachelor's degree)**** |
| Opportunities to work in the field or on the telephone** |
| CONS of Becoming an Insurance Auditor |
|---|
| Salaries might vary significantly, depending on geographical location*** |
| Travel is required in many positions** |
| Job tasks might be somewhat repetitive*** |
| Upward mobility may be somewhat limited*** |
Sources: *The Institutes (the American Institute for Chartered Property Casualty Underwriter/CPCU and the Insurance Institute of America/IIA), **National Society of Insurance Premium Auditors (NSIPA), ***PayScale.com, ****Various job postings (found May 2012).
Career Information
Job Description and Duties
As an insurance premium auditor, you might schedule appointments with clients, meet with policyholders and travel to locations of the insured parties to review their financial documents to make sure a business is properly insured. Your audit information would probably be entered on a laptop computer. You'd then write up a report identifying exposures to help determine the premiums. Much of your work would probably be done independently, but you might communicate with many others besides the insured parties, such as agents, underwriters, accountants and claims examiners.
As an insurance premium telephone auditor, you perform audits over the telephone on some of the less complicated accounts with lower premiums. You could secure payroll records information and tax documentation. You might also assist with data entry, policy processing, policy issuance and document generation. Some telephone auditors might also use the Internet or mail as a means of gaining information.
Salary Info
In July 2015, PayScale.com listed a national salary range for senior premium auditors of about $43,000-$81,000 per year. The site also reports that regular auditors in all fields, which includes insurance auditors, made a median salary of about $52,000. Pay could vary greatly by geographic location.
What Are the Requirements?
Education
Although a college degree isn't required, you might have the best job prospects with some postsecondary education. You might complete select courses in finance, insurance and accounting. You could also earn a 2- or 4-year degree in one of those same areas or in business administration.
What the Employers Were Seeking
Although a college degree isn't required, many employers looked for postsecondary education or specific types of work experience. Read the following excerpts taken from real job postings in May 2012 to find out what the employers required.
- An insurance company in Iowa advertised for a full-time premium auditor to perform audits on property/casualty commercial lines insurance policies. This employer required a degree in accounting, business administration or a related field. Equivalent work experience would be considered. Experience of 1-3 years was preferred, and intermediate level knowledge of Excel was required. Daily travel was involved in this position, including 5-7 overnights per month.
- An insurance company in California sought a premium auditor with a bachelor's degree in a business-related discipline, strong Excel skills, working knowledge of Microsoft Office Suite and a valid driver's license. Travel percentage for this position was 50%, and the base pay was $55,000 to $67,000 per year.
- A national premium audit provider advertised for a part-time, per assignment opportunity in Michigan. You'd schedule your own appointments and travel regionally. This employer provided free online training for this position, but previous experience in premium auditing, bookkeeping, payroll or other financial records was appreciated.
- An insurance company in Minnesota looked for a premium auditor to administer internal audits on workers' compensation policies. These audits would be performed by Internet, mail and telephone. This employer required an associate's degree or equivalent work experience, excellent customer service skills, strong math and accounting skills, accurate data entry skills and sound independent judgment.
How to Stand Out in the Field
Your resume may end up near the top of the pile if you earn a college degree, professional designations and certifications. In addition, the Institutes also offer other short courses, seminars and research reports oriented toward the insurance industry. You might also consider joining professional organizations, such as the NSIPA.
Designations and Certifications
You might consider earning the designation of Associate in Premium Auditing (APA) through the Institutes. This program includes five courses and computer-administered exams. After you have your APA and 3 years of field experience in performing audits, you could also earn certifications through the National Society of Insurance Premium Auditors (NSIPA). The highest professional designations are the Certified Insurance Premium Auditor (CIPA) and the Certified Insurance Premium Telephone Auditor (CIPTA). As an extra bonus, the insurance education credits that you've earned can be used towards degrees from at least 13 different colleges, as of May 2012. Degrees range all the way from an associate's degree to a Ph.D. Many of the programs are online.
Other Careers to Consider
Loan Officer
Maybe you've decided that the travel required of an insurance auditor isn't right for you, but you would still like to put your knowledge of finance to use. You might want to consider becoming a loan officer. In this career, you could work in a bank, credit union or mortgage company. You'd evaluate and recommend approval of applications for loans. You can get started with just a high school diploma; the median annual pay in May 2011 was around $58,000, according to the U.S. Bureau of Labor Statistics (BLS).
Actuary
Maybe you'd like to put your bachelor's degree and strong math skills to work earning an even higher salary than that of an insurance auditor. In that case, consider a career as an actuary. You'd analyze financial costs of risk using math, financial theory and statistics. At least a bachelor's degree is required, and according to the BLS in May 2011, the median annual pay for this profession was approximately $91,000.
