Insurance fraud is estimated to be an $80 billion a year industry, according to the Coalition Against Insurance Fraud. In order to combat the crime, which is increasingly committed by organized fraud rings, insurers are looking to implement automated analytics and detection systems.
Executive SummaryAnalytics don't just give insurers the ability to spot fraudulent claims and avoid unnecessary payouts. Automating fraud detection means removing a snag in the entire claims handling process and allowing insurers to take better care of honest customers, a systems consultant contends.
“It’s an essential part of a high-impact fraud prevention operation,” said Peter Cates, senior business solutions consultant within the financial practice at BAE Systems Applied Intelligence’s insurance team. “I can’t see organizations really tackling organized fraud successfully without that component to it.”
Analytics systems are designed to detect fraud and facilitate investigations while giving carriers that use them an advantage over competing carriers that don’t have the systems up and running optimally yet, he said.