Page 12 - Risk Management Bulletin Jan- Mar 2021

RMAI BULLETIN JANUARY TO MARCH 2021

o To prevent issuance of policies which are likely o Industry Feedback: Flagging of policies based
to give early claims. on negative feedback received from the
Methodology Industry.
o Data of policies issued during the past These Initiatives will require one-time cost for the
financial years can be used to build the model. insurer.

o The variables considered for analysis can be
customer demographics, policy information Insurance Fraud Controls through
and intermediary behavior. Based on Awareness sessions on Frauds
statistical analysis, significant variables can be
derived for the predictive model. Fraud Awareness Day
Many companies celebrate fixed dates of a year as
Again this is one-time cost for insurer. Fraud Awareness Day.

Y Policy Servicing Stage They take following initiatives to spread awareness
o Customer walking mandatory for policy about Fraud awareness.
servicing changes. (Address Change/ Y Theme based poster competition for employees.
Nomination Change). Y Online quiz on Fraud Management.

o Thorough check of high value customers Y Mouse pad with Fraud Management message -
before any payout. gets distributed to all employees.
o Roll out of ORMS [Operational Risk Y Fraud related videos gets created highlighting
Management System] wherein Risk aspects is effects of misconduct
checked in all stages of policy servicing.
Y Coffee mugs with Fraud Management theme
o Creation of an incident reporting platform and based logo.
awareness to employees for reporting any
Y Pledge Calendar aimed on personal ethics &
suspicious /fraudulent instances.
Conduct.
First two initiatives will not require any cost,
but last two initiatives will require one-time Now, let us see few examples wherein cost
infrastructure investment for the insurer. involvement is almost negligible.
Y Claims/ Surrender Stage
A) Insurance Fraud Controls through Profiling
o Fraudulent Death Claims Detection Model: To the Fraudster:
predict the chance of a claim proposal,
resulting into fraudulent claims using Pre-planned fraudsters
Y Who start out from the beginning planning to
statistical model.
commit fraud.
o Very Early Death Claim Analysis [VEDC]: Early
Death claims which gets reported within one Y Can be short-term players, e.g. who use stolen
year of policy issuance is considered to be credit cards; or can be longer-term, like
very early death claim. Analysis to be done on bankruptcy fraudsters & those who execute
complex money laundering schemes.
a monthly basis on VEDC. Call for initial
observations from the Sales Intermediaries Intermediate fraudsters
and Branch Head for all very early death claim Y Who start off truthful but turn to fraud when
intimated during the particular period. times get tough or when life happenings, such as
Actions can be initiated, if any adversity annoyance at being passed over for promotion or
found. the requirement to pay for care for a family
member, change the usual mode.
o Roll out of Fraud Risk MIS (Online MIS
reports): The very early death claim reports Slippery-slope fraudsters
can be provided to sales personnel. These Y Who just carry on trading even when, objectively,
reports can be built and mapped as per the they are not in a situation to pay their debts. This
sales hierarchy. Death claim intimations can can apply to normal traders or to key business
be populated on real time basis. people.

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