It takes more than a hunch. The traditional tools used to detect insurance fraud include internal audits, whistleblower hotlines and software that flags unusual claim activity. But criminals engaged in insurance fraud have become increasingly sophisticated. Fortunately, so has the insurance industry, and we now employ advanced analytics to help identify more questionable claims earlier than ever.
There are two types of fraud: opportunistic or soft fraud, when there is a legitimate claim, but individuals inflate damages or repair costs, and professional or hard fraud, when organized groups work together to deliberately damage property or stage thefts or accidents. Advanced analytics use predictive behavior and patterns to uncover possible criminal intent.
Tools used include social media analytics or text mining to detect patterns and key words that may lead to inferences about daily activities or relationships between claimants. Geospatial analysis provides key data about the accident location as well as the physical distance between the claimant’s homes. Link analysis collects and compares addresses, phone numbers, vehicle numbers and other identifying information. Using predictive analysis to review previously scattered data from multiple company departments, including policy details, previous claims and adjuster reports, can reveal patterns we used to miss. Knowing that individuals have been involved in similar incidents or have appeared with the same group of claimants on earlier dates initiates suspicion and prompts more investigation.
While Cognizant, a research and analytics company, reports that fewer than twenty-percent of fraudulent claims are currently detected, predictive analytics are a powerful new tool that will help us improve those odds. And as we uncover fraudulent claims quicker and sooner, there will be more money and more time saved for everyone. Now that’s math we can all understand.
Should you suspect fraudulent activity, please contact Canal IMMEDIATELY.
SIU Hotline 877.561.1599