Insurers can see 7:1 return on investment by implementing anti-fraud practices

By proactively mitigating against fraud and investing in anti-fraud practices, insurers can see a potential return on investment of 7:1, according to Jeffrey T. Bowman, president and CEO of Crawford & Company.
In the fall issue of Claims Advisor, Bowman notes that in today’s economic climate insurers around the world have developed a reduced tolerance for fraud and the hefty price tag it carries.
He offers the following suggestions to help insurers and companies identify and eliminate fraud. They include:
• C-level promotion of anti-fraud strategies. “Fraud prevention is becoming a central function with internal control systems and audits,” he wrote. “Anti-fraud policies are reinforced with business values, procedures, training and measurement of results.”
• additional data analysis and sharing. Databases that pooled claims data are not a new concept, but insurers are now investing in analytical software to help identify risk trends and patterns in the data. “And they are further sharing that information with industry databases to assist in more proactive fraud detection and prevention.”
• investing in predictive fraud modelling. “Similar to the applications used by credit card companies to flag potential fraud while users are actually making purchases, this technology can capture and match data sets against profiles to see where fraud might be happening in real time,” Bowman wrote.
• increased use of effective claimant interviewing techniques. Open-ended questioning techniques take advantage of what we know about the psychology and mechanics of lying. Historically, these techniques have been used to adjust homeowners and auto claims, but due to their success, adjusters are now adopting them for use with other lines, including travel, warranty and liability.