September 8, 2016 by DSB Claims
When it comes to insurance fraud, the bad guys never seem to run out of ways to cheat the system. It’s a staggering problem – probably bigger than you think. Just how big?
Fraud is prevalent in every line of insurance. Just one example – industry studies estimate that 10 percent or more of property/casualty claims are fraudulent. Fraud is almost as big a crime as tax evasion. According to the Coalition Against Insurance Fraud, 5 to 10 percent of insurance claims costs in Canada and the U.S. are due to fraud, and nearly one-third of insurance companies say fraud is as high as 20 percent of their claims costs.
Scams run the gamut
Insurance fraud schemes cover everything from the most pedestrian – such as pretending to lose an expensive piece of jewelry, then filing a claim – to phony “slip-and-trip” liability claims and property arson, to organized fraud rings perpetrating crimes such as staged auto accidents and fake injuries, stealing millions in false claims, often with crooked doctors and lawyers on the take.
Add it all up and these rip-offs cost Canadians tens of billions of dollars every year in higher insurance premiums, higher taxes, and higher prices for consumer goods, just for starters. And insurance fraud is on the rise, with fraudsters getting more sophisticated in their tactics all the time.
But the war against fraud is being waged on multiple fronts, and technology is increasingly giving insurers new tools to combat both opportunistic and organized fraud.
Technology: changing the game
Here are a few of the modern tech tools being employed today in the war against fraud:
Big data: the key ingredient
The glue that holds it all together and makes everything work is data. It’s the most valuable commodity in any anti-fraud campaign. The diversity of data sources for detecting fraud continues to grow exponentially, and through technological advancements in data sharing and data analysis, insurers today can anticipate, detect, and prosecute fraud more quickly and decisively.
In the end, no single technology can fight this battle alone. It takes a combination of tools to identify both opportunistic and organized fraud, conduct an investigation, build a case, and ultimately prosecute. But the combination of today’s modern tech tools is changing the game.
Remember, insurance fraud isn’t just your insurance company’s nightmare. Fraud is stealing millions of dollars every year from businesses just like yours. When you need a third party claims administrator that’s equipped with the modern tools to fight claims fraud and protect your bottom line, give us a call at DSB Claims.