Claims fraud may occur in only 2 percent of claims, according to some estimates, but early detection — and prevention — are growing in importance. Why? According to a new study by Celent, as reported in Insurance Networking News, property/casualty insurers have faced increasing challenges in generating underwriting profits. Those challenges result in more pressure to improve insurers’ loss ratios. Reducing the effect of claims fraud, therefore, has become an important tool in protecting and improving combined ratios. And insurers are preparing to invest for results.
Celent forecasts that carriers “will greatly increase investments in claims fraud detection in the next three to five years,” according to INN. To succeed, fraud detection software should include enriched data sets, better usability, and integration to outside data sources.
For ISO Claims Solutions customers, that’s already happening. In addition to the new ISO ClaimAlert™: Foreclosure product, which provides early detection of foreclosures for property claims, we’re preparing to launch a new predictive analytics platform at the end of the second quarter. The tool will proactively scan the 850 million claim records in ISO ClaimSearch® to identify early indicators of organized fraud, increasing speed to detection and reducing the financial effects of fraud rings on the insurance industry. The network analytics system will be the only organized fraud detection platform that provides industrywide perspective, as a result of its exclusive connection to ISO ClaimSearch.