Insurance Companies Refine New Tools to Beat Fraud
By Ashley Mazerolle, Marketing −
Insurance industry combats fraud with tech, saving millions and ensuring profitability.
In a world where billions of dollars are lost annually to fraud and corruption, the battle against increasingly sophisticated criminals is forcing industries to adopt innovative measures. One sector grappling with substantial losses is the insurance industry, historically reliant on business rules and manual processes to tackle fraudulent claims. However, as these traditional methods prove ineffective against modern corruption, insurance companies are turning to technology to refine their tools and combat fraud more efficiently.
Recognizing the need for a paradigm shift, insurance companies have embraced electronic means to detect and prevent fraud. By incorporating algorithms that analyze claims for patterns and key words, they have developed a system capable of identifying potential fraud more effectively than traditional methods. The results from testing this strategy have been promising, marking a significant step forward in the industry’s fight against corruption.
Not content to stop there, the insurance sector has continued to evolve its detection schemes. The focus shifted towards studying relationship patterns, identifying associations with individuals previously caught in fraudulent activities. A historical regression model was implemented, leveraging data from past identifications to track down potential fraudulent customers. The success of these tests prompted a complete transition from outdated methods to a new detection technique.
Now armed with a combination of algorithmic analysis, social media scrutiny, and a robust regression model, the insurance industry rates customers’ probability of committing fraud. This multi-faceted approach has proven remarkably effective, successfully identifying 90 percent of fraudulent behavior perpetrators. The three-month project not only paid for itself but saved the industry a staggering 30 million dollars annually, demonstrating the worth of the investment.
While various industries face the persistent threat of fraud and corruption, implementing new detection methods requires resources. Yet, the long-term benefits far outweigh the initial costs, providing a more effective way to safeguard profits.
In the realm of fraud detection, advancements like EyeDetect™ offer a non-intrusive alternative to traditional polygraph tests. This technology presents a series of true or false statements to identify deception, recorded by an optical scanner with an 85 percent accuracy rate. By preventing and identifying those engaged in fraudulent behavior, such innovations contribute to minimizing fraud and corruption within the industry.
As insurance companies refine their tools and embrace technological solutions, the battle against fraud takes on a new level of sophistication, offering hope for a more secure and profitable future.
Photo by: Kindel Media
