Updated October 26, 2023
In order to control costs and save money, some businesses elect to self-insure. These companies can face special challenges when it comes to claims processing. For example, their in-house risk management may have insufficient information, resources, and the capabilities to properly review claims that may otherwise appear suspicious. This can leave the organization vulnerable to fraud and undetected leakage.
The $Billion-Dollar Fraud Problem
Each year insurance fraud steals at least $308.6B from American consumers. It’s also been estimated that 10% of all property-casualty losses have some element of fraud. As for undetected fraud, those losses remain unknown—but are virtually guaranteed to be significant.
Historically, insurance fraud has increased during times of economic uncertainty. For example, during the period leading up to the 2007 financial crisis, an increasing number of US citizens resorted to discarding their unwanted vehicles (and their associated loans) as a last-ditch effort to avoid personal financial collapse.
With the current level of inflation and economic uncertainty, fraud may potentially be more prevalent, and many fraudulent claims could be paid without needed scrutiny. Self-insured companies may be unaware of crucial indicators that fraudulent claims are being processed.
Guarding Against Fraud
Some companies rely on third-party administrators (TPAs) to process their claims. For those who don’t contract with a TPA—or who see the value in an additional layer of fraud review—a claims intelligence and anti-fraud platform is crucial in protecting a company from fraudulent claims.
A claims intelligence platform helps identify suspicious attributes of a claim, including entity and event details. It provides insights to help claim handlers quickly triage claims, for fast payment or investigative review.
Verisk’s Claim Essentials provides an exclusive window into historical industry-wide data (over 1.6 billion claims) and new data (about 175,000 claims daily). This powerful platform harnesses advanced analytics and data-driven insights to streamline the claims process, enabling insurers to make faster, more accurate, and cost-effective claim assessments. By leveraging extensive datasets, artificial intelligence, and predictive modeling, Claims Essentials offers insurers the ability to detect fraud, assess risk, and settle claims with greater efficiency and precision.