Filed Under:Agent Broker, E&S/Specialty Business

Using technology to take a bite out of fraud


The move from paper claims forms to filing online means insurers need to use different tools to identify possibly fraudulent claims. (Photo: Shutterstock)
The move from paper claims forms to filing online means insurers need to use different tools to identify possibly fraudulent claims. (Photo: Shutterstock)

Would you trust a person who you’ve never met to give you thousands of dollars just because they claimed something happened, and they weren’t at fault?

For me, the answer is a simple, no. The same should hold true for insurers, their customers and verifying sensitive documentation.

In the case of online filing, neither the customer nor their documents are physically present, and it is unwise to authenticate a person based on this information alone, especially since insurance companies are seeing an increase in fraud during the claims process.

However, insurers armed with the right tools can combat fraud head-on. All of this is possible by employing some of the simplest, most fundamental technologies known to man, such as the screening process, social media and email.

Related: Lemonade continues to disrupt the insurance sector.

adjuster reviewing and insurance claim

(Photo: Shutterstock) 

Better overall screening

I recently read that $80 billion dollars each year is spent on paying fraudulent insurance claims. How can insurers prove false claims? The solution is simple, better overall online screening that incorporates document verification into the claims process from the very beginning.

The 140-year-old insurance industry has constantly battled fraudulent claims and schemes. However, the tide is turning, as a number of tools are available to help insurers fight fraud.

Humans have always been one of the first points of contact for insurance claims, but because of the massive volume of claims, humans can often be inaccurate, overworked and are more prone to error as a result of these conditions. Insurers must implement technology that recognizes fraud from the first point of contact.

What should insurers look for when choosing a solution?

There are a number of options on the market, but insurers should consider a technology solution that:

  1. Verifies documents quickly & accurately – helping insurers reduce wait times during the claims process.
  2. Utilizes data analytics to verify important documents and is capable of substantiating anything from passports to birth certificates and other important claims-related documentation.
  3. Uses machine learning or other smart technologies that allow the solution to adapt to ever-changing behaviors of fraudsters.

using social media for fraudulent claims

(Photo: Shuttestock) 

Scour social media

Because the claims process can take longer than expected due to the investigation process and identification of important documents, criminals now have more time to slip up and post incriminating information on their social media profiles.

Train claims adjusters on how to properly use hashtags, online search tools and what to look for when fraud is suspected. Typical things to look for are: photos of the alleged fraudster doing something strenuous when he or she is supposedly hurt due to an accident or boasting online about new material possessions because of a “big payoff” recently received as a result of an accident.

Related: 8 tools for using social media to fight insurance fraud

Utilize email

One of the oldest technology solutions has 2.5 billion users worldwide. For this reason, this tool is a powerful resource for insurers hoping to push information to customers during the claims process.

How will email be utilized in a non-marketing sense? Think of it as an inexpensive, preventive marketing tactic that helps reduce the number of false claims through informational emails with tips on ways to reduce potentially fraudulent claims. Insurers can also send tips to policyholders explaining how to protect their sensitive data throughout their claim.

Here are a few tips to help policyholders navigate the claims process:

  1. Policyholders should send original copies of requested documents (unless instructed that copies are acceptable), so identities are never questioned during the process.
  2. Alert policyholders that some of the documents they receive may be difficult to understand, so they may want to consult an attorney who specializes in insurance claims during some part of the process.
  3. Actual proof is the best way to fight suspected fraud. Tell policyholders to take photos of any physical damage to themselves, their property or the property of others as part of documenting the claim.

Implementing these simple yet preventative measures can increase productivity and expedite the claims process, and may have a positive impact on decreasing fraud. In the long-run, this will not only make employees and policyholders happier, but this can also increase favorable brand recognition for your company.

Ron Atzmon is managing director of AU10TIX Limited, pioneers of multi-channel ID Authentication and record generation. Under Atzmon’s leadership, AU10TIX introduced the concept of “Secure Customer Onboarding,” redefining fraud prevention best practices but also influencing customer acquisition success rates across financial services markets. He can be reached at enquiries@au10tix.comOpinions expressed are the author's own.

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