Earlier this year, I wrote an article for Claims Magazine called “Going After the Big Fish: Fighting Organized Rather Than Opportunistic Fraud.” In it, I discuss some of the results of the Accenture Insurance Consumer Fraud Survey, which linked poor customer service with a higher incidence of opportunistic fraud. By making service improvements, insurers can greatly reduce the likelihood of opportunistic fraud. However, it can be much more complicated to fight organized fraud.
Establish business rules
One of the first steps to reducing losses due to fraudulent claims lies in establishing business rules. These rules can identify and screen claims against the most common types of fraud. By detecting anomalies, insurers can refer suspect claims to special investigative personnel more efficiently.
Use predictive analytics
Next, predictive analytics can review previous fraudulent claims to identify indicators of fraud. Insurers can detect and refer suspected fraud early in the claim process, reducing payouts for false or exaggerated claims. It can also provide business intelligence so that insurers can make better decisions about taking on certain types of clients.
A well-designed analytics toolbox can include data mining, scoring frameworks, data visualization tools, forecasting models and statistical analysis.
Leverage pattern recognition
Effective fraudsters can slip past the combination of business rules and predictive analytics. Pattern recognition, mapping techniques, social network analysis and data mining are all additional strategies that insurers can use to combat organized fraud.
Take an integrated approach
Insurers can use each of these strategies individually, but they are most effective when layered and integrated into the enterprise. By addressing fraud in the light of recovery, loss reserving, workforce training and development, personal injury management and customer service, insurers are more likely to be successful at reducing losses due to fraudulent claims.
In fact, the most successful approach to combating fraudulent claims is achieved with three critical things: good data, good people and good technology.
Have you read my two-part post about the Accenture Insurance Consumer Fraud Survey? Part one focuses on the results and what insurers can do to address fraud, while part two discusses what insurers can do to detect and deny fraudulent claims.