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Cutting-edge strategies to fight insurance fraud

by | Apr 19, 2021 | Insurance Defense

Two years ago, the Coalition Against Insurance Fraud and the SAS Institute published a report with data collected from surveying 84 property/casualty insurers. Nearly 75 percent of those surveyed believed that fraud has increased in the past three years. Their speculation turned out to be accurate as fraudulent activities experienced an 11-point jump from 2014.

In fact, all the insurers who participated in the study believed that these illegal scams are anything but in decline. Ninety percent revealed that they use technology to detect claims fraud.

The transition to technology

Before the advent of cutting-edge technology, identifying acts of fraud presented challenges. Investigators had to pour through reams of documents to find a pattern of suspicious activity. Fast forward to today. Those traditions have been replaced by smarter and more cutting-edge strategies on a foundation of innovative technology.

Modern fraud investigations are by and large paperless. While time-saving, challenges still exist regardless of the sophistication of these technological tools to combat these illegal enterprises finding new ways to create more effective scams.

One of the more effective tools in finding fraud comes from ClaimSearch, a “one-stop-shop” database composed of all insurance industry databases into one portal. It represents the largest and most comprehensive source of claims information. While the insurance industry is highly competitive and working together in any form seemed impossible, stopping fraud is their unifying principle.

Proactive steps are paramount and can actually identify illegal acts before payment of a claim, instead of after the fact when the claimant already has the money in hand. Innovations include predictive modeling, link analysis, and other tools to identify associations between certain aspects, including people, places, and events.

The uphill battle continues, considering that the FBI estimates non-health insurance fraud comes at the cost of $40 billion per year. Insurers are not the only ones impacted, as the survey revealed a “trickle-down” effect that costs individual U.S. families up to $700 annually.

Insurance DefenseCutting-edge strategies to fight insurance fraud