Page 41 - Insurance Times Octoberr 2022

additional data on financial behaviour. The success of the relying on their own internal data, insurers are turning
battle against insurance fraud therefore depends on two to industry fraud-watch lists, public records, third-party
elements: data aggregators, social-media data and data from
The level of priority assigned by legislators, regulators, personal devices.
law enforcement agencies and society
A picture is worth a thousand data points. Insurers
The resources devoted by the insurance industry itself are flocking to photo analysis technology to
authenticate claim damage, identify digitally altered
Most insurers have established special investigation units images, and index pictures submitted in other claims.
(SIUs) to help identify and investigate suspicious claims.
Investigators are clamoring for more resources. New
These units range from small teams, whose primary role is
anti-fraud technology is creating efficiencies in
to train claim representatives to deal with the more routine
investigative processes, but the resources insurers are
kinds of fraud cases, to teams of trained investigators,
dedicating to internal and external investigative teams
including former law enforcement officers, attorneys,
are insufficient to keep pace with the billions in fraud
accountants and claim experts. More complex cases
committed each year. Limited IT resources were the top
involving large-scale criminal operations or individuals that
anti-fraud challenge.
repeatedly stage accidents may be turned over to the NICB,
which has special expertise in preparing fraud cases for trial
India's insurance industry has significantly digitised its fraud
and serves as a liaison between the insurance industry and
investigations in the wake of the covid-19 pandemic, a new
law enforcement agencies.
survey of industry professionals has revealed. Organizations
were using digital solutions for investigations, while some
are in various stages of planning the transition to digital.
Use of technology to combat fraud
One of the most effective means of combating fraud is the
adoption of data technologies that cut the time needed to
recognize fraud. Advances in analytical technology are
crucial in the fight against fraud to keep pace with
sophisticated rings that constantly develop new scams.
Traditional approaches, such as using automated red flags
and business rules, have been augmented by predictive
modeling, and link analysis-which examines the relationships
between items like people, places and events. Artificial
intelligence can be used, among other tools, to uncover
fraud before a payment is made. These newer strategies
are employed when claims are first filed. Suspicious claims
are flagged for further review, while those with no
suspicious elements are processed normally.

In search of refinement, insurers are blending tools to
Additional takeaways from the latest study
improve their fraud detection programs. Programs that scan
include:
insurance claims have been improved by the consolidation
Anti-fraud technology is flourishing. The study identified
of insurance industry claims databases. Systems that identify
automated red flags (88%), predictive modeling, text
anomalies in a database can be used to develop algorithms
mining, reporting capability, case management,
that enable an insurer to automatically stop claim payments.
exception reporting, and data visualization/link analysis
The greatest challenges for insurers are limited IT
among insurers' most used anti-fraud technologies.
resources, which affects about three-quarters of insurers.
Insurers are diversifying their data sources. Beyond This is followed by problems in data integration.
The Insurance Times, October 2022 41