According to the National Insurance Crime Bureau, an estimated 10 percent of all property and casualty insurance claims in the United States are fraudulent. Based on Accenture experience, fewer than 20 percent of fraudulent claims are detected or denied.
Fraudulent claims can have negative effects on a carrier’s bottom line, risk management practices and reputation. It’s a fine balance to process claims efficiently and fairly, while still taking steps to verify that claims are valid and real.
Results of Insurance Consumer Fraud Survey 2010
Consumer attitudes and behaviors toward fraud have significant influence on insurance companies’ claims volumes and costs. To explore these attitudes, Accenture commissioned an online survey of 1,013 US adults. There are four key findings from the survey:
- More than half (55 percent) of respondents believe that poor service is more likely to encourage fraud.
- In a challenging economy, claims filing frequency increases. As the frequency of claims files increases, so does the potential for fraudulent claims.
- More than 68 percent of respondents believe that insurance fraud occurs because people believe they can get away with it. This is an increase our first US consumer fraud survey, in 2003, in which 49 percent of respondents believed this.
- Most consumers view fraud as unacceptable and trust that insurance companies are capable of detecting and denying fraudulent claims.
What insurers can do to address fraud
Accenture believes that insurers need to adopt a two-pronged, hybrid approach to detect fraud.
- Provide better customer service. Focus on customer experience and retention, and foster customer loyalty. As the survey results show, poor customer service can be a motivator for making fraudulent claims. Providing exceptional customer service isn’t just a deterrent for fraud; it’s also good for business.
- Implement analytics tools. Analytics can help insurers focus on, detect and tackle organized fraud.
Next week, I’ll talk about what insurers can do to detect and deny fraudulent claims.
Accenture has developed a Point of View on this topic. Download Improve Customer Service and Fraud Detection to Deliver High Performance through Claims.