What Is an Associate In Premium Auditing (APA)?

Associate In Premium Auditing (APA) is a professional designation awarded by The Institutes, a nonprofit trade organization that provides training for those who are in, or who want to join, the insurance industry.

An APA is generally a Certified Public Accountant (CPA) whose specialty lies in the field of insurance—they have been granted the professional status (and presumably have the expertise) to audit premiums, analyze contracts, and perform other financial duties for insurance companies. To gain the designation of Associate in Premium Auditing, a series of exams must be passed successfully.

Key Takeaways

  • The Associate In Premium Auditing (APA) is a professional designation for accountants specializing in the field of insurance.
  • The APA credential is awarded and administered by The Institutes, a nonprofit insurance industry organization.
  • APAs have the expertise to audit insurance premiums and analyze insurance contracts, among other duties for insurers.
  • Obtaining the APA is a 12-18 month process, requiring individuals to pass five different courses relating to auditing techniques, insurance-company financials, and business ethics.

Understanding an Associate In Premium Auditing (APA)

A person holding the Associate in Premium Accounting designation has a comprehensive education in insurance contracts, auditing procedures, principles of insurance accounting, casualty insurance company accounting, and the relationship of premium auditing to other insurance operations. In short, they are expected to have accounting skills as well as extensive knowledge of insurance principles.

Individuals who have achieved the APA designation are widely believed to be experts in analyzing insurance contracts with an eye for parsing financial data. Their collective skills are not limited to, but often center on, the ability, to inject accounting and auditing methodologies with the many nuances of insurance products and insurance operations.

Among many other functions, individuals with the APA designation help strengthen the accounting and control protocols necessary for insurers to get more competitive with their pricing and products while maintaining high standards of fiscal management.

Obtaining an Associate In Premium Auditing (APA)

One of 28 professional designations offered by The Institutes, the APA is considered a "specialized designation" by the association—meaning, it is a fairly advanced one. It's recommended for aspiring underwriters or auditors of premiums. Some of them are designed specifically for the APA program and others are Chartered Property Casualty Underwriter (CPCU) courses, another designation offered by The Institutes (these courses count towards getting that credential as well).

Applicants are required to pass exams in five out of six courses to obtain their APA credentials. Class materials and exams range in price from $260 to $425. Here is the current curriculum.

Principles of Premium Auditing

A required course. Topics include insurance law, premium audit planning, review of insured’s employees and operations, accounting system evaluation, audit program design, data verification and analysis, premium audit report, communication and premium auditing, professionalism in premium auditing, and premium audit technology.

Premium Auditing Applications

Another requirement, the subjects covered include insurance rates and rate regulation, workers compensation insurance, premium determination and construction operations, maritime workers compensation, commercial general liability, business auto, motor carrier, garage, and commercial property/inland marine insurance and premium determination, and other premium auditor roles.

Connecting the Business of Insurance Operations

One of the CPCU courses, this mandatory class uses real-world scenarios to cover such topics as regulating insurance operations, marketing and distributing insurance, underwriting risk, understanding risk control and premium auditing, analyzing claims, developing insurance rates, exploring reinsurance, evaluating technology needs, and examining strategic management. 

The average completion time for earning an APA takes 12 to 18 months, according to The Institutes.

Impacting the Bottom Line of Insurance Financials

Another CPCU course, this elective deals with topics like leveraging GAAP financial statements, deciphering insurer financial statements, leveraging insurer financial data, understanding corporate investment, following the money in financial markets, understanding stocks and bonds, maximizing insurer investment income, meeting insurer capital needs, and breaking down capital requirements.

Addressing Commercial Liability Risk

Topics for this elective course, another CPCU class, include managing commercial liability risks, applying for coverages, analyzing the business auto coverage form and selecting coverage, managing payments for employee illness and injury, managing professional liability, increasing liability protection, and marine and aviation coverage.

Ethical Decision Making in Risk and Insurance

A course required for most of The Institutes' credentials. Topics include the foundations of ethical behavior, supporting professionalism, maintaining high ethical standards, ethical responsibility to groups, an approach to resolving ethical dilemmas, ethical perspectives, ethical decision-making tools, barriers to ethical decision-making, ethical guidelines for insurance professionals, and ethics case studies.

Special Considerations

The Institutes, which oversees and awards the Associate In Premium Auditing designation, dates back to 1909. Originally known as the Insurance Institute of America (IIA), it was founded primarily to educate risk managers,  insurance agents/brokers, underwriters, and other insurance professionals by conducting seminars.

Since then, its scope and reach have grown significantly, as it "works on a global scale as the leading provider of education and research" for professionals in the commercial, personal, and life and health insurance industries.