How has technology changed the way insurers fight fraud?
What has really changed is the way that companies optimize and deploy the data and analytics equation. Years ago companies were requesting and getting information from central repositories via mail and via fax. So adjusters had to wait for the information to come and then sift through paper index cards. With large portfolios and hundreds of claims to evaluate, it took extensive time and effort to determine the presence of claim patterns—and of the red flags.
Today, it’s a completely different ecosystem. In real time, adjusters can not only report, but also retrieve, the same information—and more—in a matter of seconds. The breadth and depth of the data and its accessibility has really opened up the space for the full implementation of analytics in fraud detection, and that in turn has helped to speed up processes to keep pace with the changing nature of the large-scale fraud schemes.
What are the fraudsters doing?
Based on the schemes, it would seem fraudsters are trying to use data and analytics, too. We see from some of the patterns that the fraudsters are also getting sophisticated in terms of how they mask and fake information to present a fraudulent claim to insurers.
What are the other benefits of the new analytic tools?
The technology that’s available allows you to collect more data and to sift through it very quickly. But our customers need some form of analytics to try and make sense of all that data. The [ISO ClaimDirector claim scoring system] helps companies distinguish between what’s meritorious and what is suspicious. This can all be done in real time at first notice of loss, so meritorious claims are processed much faster, improving customer service. Those claims that warrant further analysis are referred to the special investigations unit. That ability to increase early detection of fraud helps reduce the loss costs associated with fraudulent claims.