Two forces are coming together to battle claims fraud in Canada and the United States. Guidewire Software is partnering with analytics firm FICO to target personal auto claims fraud by leveraging data collected throughout the claim cycle.
FICO’s integrated analytics solution will help insurers pinpoint at which stage in the claim fraud occurs, allowing their claims or special investigative unit departments to respond in real time. FICO also provides such analytics for consumer fraud alert use, credit card applications, and enterprise fraud.
Stated FICO Fraud Solutions Vice President Russ Schreiber, "We look forward to offering our proven fraud detection analytics as part of Guidewire's world-class claims processing platform, making it easy for insurers to find and stop auto claim fraud in real time."
Fake auto claims are a prevalent issue in Canada, with an estimated 15% of insurance premiums paid toward auto fraud claims. Staged collisions, which can involve multiple drivers, tow truck operators and clinics, are among the most common forms of auto claims fraud. In Ontario, which is considered the staged collision capital of Canada, insurers paid between $4 - $5 million as a result of false auto claims in 2012.
An NDP-mandated initiative to reduce auto claims fraud was rolled out in Ontario as part of the Cost and Rate Reduction strategy in 2014, and is estimated to save the province $2 billion per year. The measures grant the Financial Services Commission of Ontario (FSCO) the authority to regulate the business practices of health clinics and practitioners who invoice auto insurers.
