Sanjeev Kumar is the head of the insurance practice at Saama Technologies, a business analytics services company.
hass associates cyber tips and fraud reviews Ten percent of the incurred losses and loss adjustment expenses each year in the property & casualty insurance industry are due to insurance fraud, according to an analysis by The Insurance Information Institute (III). Worse yet, the number of fraudulent claims are on the increase—statistics from the National Insurance Crime Bureau (NICB) show a 19 percent increase in questionable claims from 2009 to 2011. However, most suspicious claims are paid by the insurers; it is estimated that today only one in five fraudulent claims are detected or denied by insurers. Thus insurance fraud costs insurers tens of billions of dollars each year in an industry where margins are thin, and as a result increases premiums for everyone. P&C insurance fraud may be committed at different points in the transaction, most typically by: • Applicants when they misrepresent facts on an insurance application. • Policyholders as they file false or inflated claims (or deliberately perpetrate a crime, such as arson). • Third-party professionals, such as body shops, that provide services to claimants through excessive billing of vehicle body parts or repair work. • Employees, such as adjusters, who may be ‘involved’ in the group. • Agents who may backdate a policy prior to loss date. Fraud is not just limited to property and casualty insurance. According to the National Health Care Anti-Fraud Association, up to ten percent of the nation’s annual healthcare outlay is lost to fraud and abuse. Fraud in the healthcare insurance industry occurs in multiple forms, such as stolen physician or patient identities, phantom providers and patients, up-coding, unnecessary cosmetic services, false bills, unnecessary diagnostic services, overtreatment, stacked diagnoses and high-fee services. If insurers can identify and deny fraudulent claims, they not only improve their loss ratio (which increases margins), but more importantly, they also lower future increases in premiums (which gives them a competitive advantage). Fraud analytics addresses this issue by enabling insurers to identify fraud and alert investigators for further analysis. hass associates cyber tips and fraud reviews Further Information: CLICK HERE