10. Fraud Detection
According to The Coalition Against Insurance Fraud (CAIF), insurance fraud costs U.S.
consumers at least $80 billion every year.
CAIF also estimates that workers' compensation insurance fraud alone costs insurers and
employers $30 billion a year. The FBI reports that non-health insurance portion of the overall
problem amounts to $40 billion annually.
Ultimately, the massive scope of the problem can mean the average U.S. family will pay an
extra $400 and $700 per year in premiums.
Claims processing is all about accuracy and speed. But that speed of claim resolution can
also result in more fraudulent claims. And two of the hardest hit areas in the Property and
Casualty (P&C) area are automobile and workers' compensation insurance. Insurers have
traditionally relied on agents, brokers, adjustors, and special investigative units (SIU) to detect
and manage fraud. But with the rising tide of data and analytical tools, carriers are fighting
back with more sophisticated analysis tools and statistical techniques. Their efforts are
helping to decrease claims adjustment expenses, reduce claims leakage, and improve the
company's loss ratio.
We realize that fraud detection tools are
not a core component of claims systems.
But it is important to note that newer fraud
detection technologies are having a
tremendous impact on fighting fraud – and
improving the bottom line.
Is claims fraud detection a big challenge for your company?
Does the claims system utilize its own fraud detection application?
If not, does the claims system integrate with other third-party fraud detection tools?
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Questions to Ask
