Protect Yourself from the Rise in Organized Claims FraudBy Thomas Mulvey | May 13, 2013
Organized fraud is extremely difficult to detect, particularly because schemes have become increasingly complex. According to the Insurance Information Institute (I.I.I.), the National Insurance Crime Bureau (NICB) released data showing that questionable claims referrals related to organized insurance fraud grew 47 percent from 2008 to 2011, reaching 3,146 questionable claims referrals in 2011. The NICB forecasts approximately 4,700 questionable claims referrals related to organized fraud for 2012 — a spike of nearly 50 percent.
Current best practices require starting from a known suspect data point and then using powerful link analysis tools, such as NetMap for ClaimSearch™, to identify connections and build out networks of suspected fraudsters. That approach is powerful, especially given the industrywide reach of ISO ClaimSearch®, but it’s still reactive. Although the results prevent future claims due to organized fraud activity, by the time an insurer identifies a suspected ring, the criminals have usually caused a considerable amount of financial damage.
In the beginning of third-quarter 2013, ISO Claims Solutions plans to release a new system that uses predictive analytics and the 860 million claim records in ISO ClaimSearch to transform organized insurance fraud detection into a proactive effort. The network analytics technology will scan ISO ClaimSearch to find indicators of organized fraud and then build out the related networks. Rather than react to the possibility of organized fraud, insurance special investigation units (SIUs) will get the head start they’ve always needed.
Interested in learning more about the new fraud detection system? To get it as soon as it’s available, let us know now you’d like a preliminary briefing on its capabilities.
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