[November 19, 2018] |
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FRISS: Insurance Carriers Prioritize Fraud Detection and Prevention
Insurance fraud is a global problem. In the U.S. alone, insurance
carriers lost over $34 billion in 2017 on fraudulent insurance claims.
It's a global problem with a growing number of technological solutions.
Big data analysis and large-scale collaboration are key to fighting
insurance fraud.
This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20181119005015/en/
Insurance Fraud Report by FRISS (Graphic: Business Wire)
The insurance industry is increasingly focused on preventing fraud
through innovative systems, relying on the assistance of specialized
vendors to help accomplish the task. The burden of detecting and
reducing fraud, therefore, no longer lies with the individual insurer.
The 2018 FRISS Insurance Fraud Survey reached over 150 industry
professionals and shows a clear picture of the current awareness and
challenges of fraud detection and mitigation.
Key survey findings show:
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Increased focus on data quality
The quality of a
carrier's data has become increasingly important. 45% of insurers
report a challenge with the quality of fraud data collected. In 2016,
only 30% of insurers saw this as a major challenge. The main reasons
noted were that too little information was available and/or
poor-quality information disrupted the process of effective and
reliable analysis. There is a growing industry awareness that quality
information is essential to improving the customer experience. Making
use of good data ensures short acceptance and claim processing times
resulting in happier customers. This data must be readily available
and consistently reliable.
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Exchange of information between insurers is vtal to stop fraud
Today's
insurance customers are more apt to request quotes and purchase
insurance online. It's easier and more convenient, and many carriers
are now actively encouraging it over traditional phone or in-office
visits. Focusing on online interactions makes it more important for
carriers to have immediate access to quality data to make smart
decisions on who to insure. The problem is that most carriers don't
have access to enough of it. Third party companies can, in theory,
pool together publicly available data as well as shared data from
other insurance carriers. Shared data includes information about false
claims, unreliable repair shops and health professionals, imagery and
information about insured assets. Years ago, this was virtually
impossible. Old thinking said data sharing would be bad for
competition, however a third of insurers surveyed now believe it's an
important tool in fighting fraud. Fraud data pools allow insurers to
detect and prevent fraud quicker and more accurately - a benefit to
all carriers with little competitive impact. While fraud data pools
are incredibly useful assets to insurers, companies must ensure they
are compliant. Many companies say this is a challenge, especially with
the introduction of the European General Data Protection Regulation
(GDPR) rules.
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Keeping systems up to date
Most insurers now realize the
only way to effectively fight fraud is by implementing advanced and
evolving technologies. Automated fraud detection is becoming more
effective every day, and carriers must keep pace in order to decrease
loss ratios. Today, over 60% of insurers utilize automated fraud
detection software to enable real-time fraud detection. Those who do
enjoy lower loss ratios, healthier portfolios, and more efficient
claims investigations. While 86% of insurers believe their current
systems are up to date, over half have difficulty maintaining their
software. They share frustrations that their internal IT departments
are not capable of keeping up and/or have other priorities. Of those
surveyed, 43% report difficulty with data integration and are affected
by too many false positives, leading to delays in the claims process.
Engaging with specialized fraud detection companies virtually
eliminates these challenges.
Improvement is still needed
Much progress has been made in insurance fraud and risk detection over
the past two years, and insurance companies still believe reducing fraud
is both socially and economically important. When it comes to fighting
fraud company wide, 30% still struggle with organizational buy-in.
Consistently updated systems working with quality data allow carriers to
make good decisions quickly. While industry awareness is growing, there
are still many opportunities for improvement.
Download
the full report here.
About FRISS
FRISS has a 100% focus on automated fraud and risk detection for P&C
insurance companies worldwide. The AI powered detection solutions for
underwriting, claims and SIU helped 150+ insurers to grow their
business. FRISS detects fraud, mitigates risks and supports digital
transformation. Insurers go live within 6 months, with fixed price
projects, and realize an ROI within 12 months. The solutions help to
lower the loss ratio, enable profitable portfolio growth, and improve
the customer experience. www.friss.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20181119005015/en/
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