U.S. insurers are defrauded of over $80 billion every year, according to a recent white paper released by The Coalition Against Insurance Fraud. The analysis of forensic accountants can knock out many unsubstantiated claims. But investigating the validity of claims is an imperfect science, and it takes time.
Honest customers suffer from the delays caused by claims investigations, usually at moments when such financial assistance is most needed. Insurance companies with extra-stringent anti-fraud policies suffer a hit to their reputation when payouts are delayed. They may also suffer from increased policy turnover.
Recent advances in data analytics point a way forward for insurance companies. Industry blog Insurance Nexus reports:
Many insurers are now capable of performing analysis with Big Data to quickly flag or validate claims. The automation process focuses on this speed and, overall, the industry is at a place where it can claim that very little gets in the way.
New innovation is helping to speed up the fraud processing of data and other services. Some providers can even process information and provide an initial analysis while a person is in an office signing up for a policy. Agents can often get a real-time approval or denial from an initial claims unit review.
Early this January, Nationwide implemented an analytics-driven fraud detection initiative when it tapped Verisk’s ClaimDirector solution to combat fraud.
According to the Verisk:
Commenting on Nationwide’s move to implement ClaimDirector, Lynne Brady, Nationwide’s vice president of External Fraud, stated, “We wanted accurate and timely identification of potentially fraudulent claims through an objective and consistent approach.”
ClaimDirector identifies potential fraud indicators at first notice of loss for each incoming claim, and the system updates when new information is added.
Brady continued, “Nationwide believes applying advanced technology to antifraud efforts will help protect our members. Adopting proactive antifraud technologies like ClaimDirector is essential in deterring insurance fraud.
Mitigating the impact of fraudulent claims helps Nationwide maintain its position within a very competitive market, Brady said.