How Technology Helps to Battle Insurance Fraud
Insurance fraud is prevalent across the entire industry, unfortunately, and it does not select favorites when it comes to claiming its next victim.
The most efficient way to fight fraud today is through technology.
Agencies are able to detect fraud faster and more accurately than ever with the use of technology.
Why is this a big deal?
Fraud steals $80 billion a year across all lines of insurance, according to the Coalition Against Insurance Fraud Estimate.
Which means the average household pays $400 to $700 more in premiums each year!
That’s a staggering number considering the technological advances available today to help prevent such fraud from occurring.
So, what can agencies do to help lower this number?
Check it out: Insurance Fraud, How Bad Is It Really? (Infographic)
There’s a number of things technology can do to combat insurance fraud.
From detection to prevention, the use of data and analytics are making their presence felt across the whole industry.
Modern-day technology has the ability to get in front of fraud and stop it from happening.
A proactive approach to security will make all the difference if and when fraud comes knocking on your agency’s door.
Automation
81% of respondents reported using automated red flags according to the Coalition Against Insurance Fraud, 2014 study.
Automation is a fairly standard tool used in insurance technology today.
In 2020, 95% of insurance agencies use anti-fraud detecting software.
Through automation, red flags will indicate when a claim appears to be odd or raise a concern.
Red flags can be raised for a number of things when claims are made.
Such as:
The claim is made just after there is a change or increase in coverage
Damaged property is insisted to have been the most expensive model of its kind without receipts
Or the insured person asks the agent hypothetical questions about coverage in the event of a loss very similar to the actual claim made.
There are countless amounts of red flags that can be brought to the attention of investigators and agents, but oftentimes, these flags are not evidence of insurance fraud when they stand alone.
When they are presented in a claim, they should be reviewed thoroughly.
According to a Coalition Against Insurance Fraud study, nearly 75% of insurers use automated systems to detect false claims — a large increase over the 2014 and 2012 studies.
And still a growing number into 2020, as mentioned earlier, 95% of agencies utilize some type of anti-virus software.
Data
Data can be overwhelming to filter through but can also be one of the most useful resources insurance agencies can use to detect and prevent fraud.
Tracking and getting the most out of data will be a great benefit to any insurance agency wishing to get ahead of fraudulent claims.
One of the most unexpected places to collect valuable data is in fact through social media.
That’s right.
Social media is a very telling place to learn more information about claims that may have some red flags, or just to gain more information about a claim that has been made.
Social Network Analysis, or SNA, is a type of social networking where people build relationships via platforms like Facebook, Twitter, and LinkedIn, which may be unknown to insurance agents at the time of a claim.
Insurance agencies and investigators use this non-private data from their customers to get to the bottom of claims.
Sometimes, social media helps agents uncover the truth about a claim made, learning it is fraudulent.
These discoveries are made through photos posted by the insured of stolen objects claimed to be lost, but are recently shown in the photos, posts attempting to sell items in the past that are now claimed to be stolen, or even a change in a job title when the insured is receiving disability benefits.
Evidence like these cases can happen and are a strong resource to have for an insurance company to win in a case of insurance fraud.
Want to learn more: The Role of Social Media In Investigating Insurance Fraud
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