Insurance
The main transaction streams are premiums and claims although there are special areas such as re-insurance where IDEA
can also be used successfully.
Premiums
The main tests are concerned with ensuring all premiums are raised and the correct rate is used. However analyses of risk and exception tests of old or forward dated items are useful.
Typical tests include:
The main tests are concerned with ensuring all premiums are raised and the correct rate is used. However analyses of risk and exception tests of old or forward dated items are useful.
Typical tests include:
Analysis
- Stratify premiums by size and product type
- Summarize new business by agent or area
- Summarize debts by agent
Calculations
- Recalculate premiums
- Prove posting totals
Exception Tests
- Extract old premiums due on policies which have not been lapsed
- Identify policies which have been cancelled soon after inception
- Identify policies with initial discounts that have then been lapsed and credited
- Extract negative debts
- Identify unallocated cash
- Extract policies with blank or invalid policy numbers
- Identify policy premiums which have only been part paid
- Look for Direct Debits which have not been collected
Claims
Claims is a classic payments area. There is usually a considerable analysis available as claims can be matched back to policy details and there are usually various claim types, reason codes and risk codes.
Claims is a classic payments area. There is usually a considerable analysis available as claims can be matched back to policy details and there are usually various claim types, reason codes and risk codes.
Calculations
- Total outstanding claims
- Prove posting totals
Analysis
- Analyze by month, type and calculate average values
- Group claims by product type
- Matrix analyze date of incident to date claim reported as part of assessing claims incurred but not recorded
Exception Tests
- High value claims
- Identify claims with no movement in the last 6 months (some claims get reported but queries on the claim are not responded to leaving old expired claims on the system)
- Identify negative balances (recoveries)
Gaps and Duplicates
- Check for duplicate claims (same policy number and either same amount or same date of incident).
- Check for multiple claims on the same policy (some policy holders are particularly unlucky however others make a business out of claiming more than once for an incident. This can be picked up by testing for claims with the same amount or same date of incident).
There are also a number of tests using cross matching between files, starting from the basic test of the existence of a policy in the same time period as the claim to checking details between claims and policies. It may be worthwhile to see how many new policies experience claims shortly after inception.
