Third Party Administrator Audit. 

An aviation industry client engaged us to audit their TPA (Third Party Administrator) to review an open case load of 5,000 open and closed claims. A focused approach utilizing best practice and results-based data was sought to identify key areas of claim frequency, severity, reserve methodology, and allocated costs.

In this case, we initially worked with the client to understand their current risk tolerances, and to establish their future standard approach to risk, insurance, and claims management. After completing an initial phase of interviews, we performed our normal audit which challenged the current methods results with a "best practice" approach. In our study, we reviewed the initial investigation including the root cause and origin analysis, the administrative handling of the claims, and the financial reserves with a “closure” mindset. Several areas of the claim were reviewed and benchmarked for compliance and adequacy including Notification; Coverage Analysis; Contract and Investigation; Injury and Damage for Indemnity, Medical and Expenses; Reserving Practice; Cost Containment Practice; Second Injury Analysis; Subrogation Practice; Litigation Management Practices; Settlement Potential; and Supervision Capabilities.

The result of our audit and solutions program suggestions yielded a net reserve reduction of over $5Million for the client. They were extremely pleased with the final results, and were able to build stronger education and training programs for the targeted primary causes of loss than in the past, while improving earnings dramatically during the first year. Eventually, with our continued analysis and monitoring, we assisted our client and TPA to obtain an audit rating result of 92%, with a net reserve reduction of over $6.5 Million over a two year timeframe.