If you work in workers’ comp underwriting or risk placement, you know how easily payroll shifts, operations evolve, and outdated class codes can derail even the cleanest account. A new Insurance Business piece highlights just how big the impact can be, and why proactive audits should be on every agent’s radar heading into 2026.
Pro Global’s 18-month analysis shows that insurers using proactive audit strategies can uncover up to 18% in additional premium that should have been captured in the first place. In other words, when exposures drift, that missing premium becomes leakage, and audits bring it back into view.
Where Premium Leakage Starts
According to Pro Global’s aggregated audit results, the biggest culprits are familiar ones:
- Misclassification
- Underreported payroll or sales
- Noncompliance with state rating bureau requirements
These issues aren’t new, but the operational shifts of the last few years, like the move from hybrid labor models to cross-trained teams, have accelerated exposure creep across many industries. And when the numbers don’t match the actual operations, carriers lose revenue and insureds face disputes or surprise bills. Robert Sherman, U.S. Head of Audit & Advisory at Pro Global, put it plainly, stating, “
Jencap’s Perspective: Why This Matters for Agents
Jencap’s own workers’ comp experts are seeing the same trends play out in real time.
“Carriers are increasingly diligent in their audit processes,” says Jeff Sandy, Vice President of Workers’ Compensation at Jencap. “Audit professionals often provide accurate evaluations, and the defense of ‘it has been done that way for years’ is not a valid justification for maintaining inaccuracies.”
For agents, that’s a strategic warning. Relying on legacy class codes or past audit outcomes can set clients up for avoidable pain, especially when a large AP premium hits months after expiration. “It is essential to take the time to review classifications and the changing operations of your insured during the renewal process,” Sandy adds. “A significant additional premium five months after the policy expiration can create unnecessary challenges.” The more complex the account, the more critical this becomes.
Market Conditions Raise the Stakes
The article also notes that while the workers’ comp market remains stable, with a combined ratio of 86.1% and frequency continuing its long-term decline, severity is rising on both the medical and indemnity sides. Indemnity severity is outpacing wage growth, and medical severity is being driven increasingly by utilization, so workers’ comp underwriting accuracy is under more pressure than ever. Clean audits help protect margins and keep pricing grounded in real exposure.
Your Next Best Move
If your clients’ operations have shifted even slightly, now is the time to tighten up exposure reporting and classification reviews. Read the full Insurance Business article for deeper insights, and if you need help navigating audits or tightening workers’ comp underwriting strategy, reach out to Jencap’s workers’ compensation specialists. We’re here to help you get ahead of renewal surprises and protect your book from avoidable leakage.
