While it may appear that insurers in Europe and Latin America (EALA) have lagged behind their counterparts in the United States in their adoption of claim analytics, Accenture’s EALA Claims Survey for 2013 indicates they are likely to catch up to their US counterparts in the next three years, when their reliance on predictive analytics will almost triple.
The single biggest factor behind this interest in claims analytics? Rising fraud.
71 percent of survey respondents say they have seen an increase in fraudulent claims over the past three years. The average reported increase is 10 percent over this period, but numbers vary significantly between different countries and carriers and typically are based on anecdotal evidence of the managers of the claims departments rather than pure facts.
These insurers believe that their inability to collect and analyze all available claims-related data imposes a severe limitation on their ability to bring down their loss costs. It makes it difficult to counter claims fraud, which is estimated to cost their combined bottom line across Europe as much as €8-12 billion a year.
Respondents indicate that better claims fraud management could help them to save as much as 5 percent of their claims costs. The challenge for them is to improve detection and prevention of fraud while processing legitimate claims efficiently and fairly.
With the backdrop of aging technology and inefficient processes that are unable to detect fraudulent claims, insurers see an attractive business case for investment into claims fraud analytics and other anti-fraud solutions.
But as important as fighting fraud is, claims analytics has a much bigger role to play. Insurers in EALA should follow the lead of their US peers, who are deriving major benefit from more specific applications of analytics, such as customer segmentation and related campaign management.
*My final blog entry wraps up this series of blogposts with a look at the benefits of claims transformation.