(Editor's Note: This article has been contributed by Janine Johnson, an analytics manager at the ISO Innovative Analytics (IIA) unit of Verisk Analytics (www.verisk.com).

It's no secret: Fraudulent claims continue to be an insidious problem for the inindustry, costing P&C insurers and consumers an estimated $40 billion a year (according to the FBI). Of course, that figure stands to skyrocket as the National Insurance Crime Bureau (NICB) reports that questionable claims (QCs) increased an unprecedented 20 percent during the first half of 2012 when compared to the same period in 2011.

Fraud is highly adaptive, responding to external stimuli and evolving over time. Historically, fraud has shifted from primarily vehicle thefts and property arson to the casualty side, as special investigative units (SIUs) clamped down on property scams. Casualty claims are notoriously more complex, involving collusion between physicians and lawyers and larger dollar amounts. These sums draw the attention of organized rings involving medical professionals and criminal syndicates.