A leading insurance industry expert has advised that claims processes need to integrate analytics-based fraud systems as well as human talent in a bid to curb sophisticated insurance fraud.
Michelle Weatherhead, BAE Systems Applied Intelligence head of financial crime ANZ, said that while existing practices work well, they can be complimented with analytics-based systems in a bid to stop professional fraudsters.
“Existing defences, rules and thresholds that safeguard an insurer and its customers are continually being tested by professional fraudsters as well as opportunists exaggerating or misrepresenting claims,” Weatherhead said.
“Reducing thresholds often increases false positives, which in turn affects service and increases the work-load of investigation teams, all with very little net reduction in the level of fraud detected.”
Weatherhead noted that a well-rounded claims service can not only have a marked impact on fraud but the data retried can prove beneficial in other areas.
“Organisations need to improve both the volume and the accuracy of detecting fraudulent claims,” Weatherhead said.
“Furthermore, they need to find ways of turning threats into opportunities. Analysing data is an invaluable aid to efficient claims processing, accurate fraud detection and even potentially pinpointing risk at the point of underwriting.
With big data a watch word for many in the insurance industry, Weatherhead notes that better use of data and analytics will help insurance professionals bolster their market position over the coming years.
“Data and analytics can help insurers gain a competitive edge,” Weatherhead said.
“Using data, organisations can more easily detect high-risk claims and put low-risk claims straight through, which will deliver a better customer experience for those with genuine claims.”