The total cost of non-health insurance fraud is more than $40 billion a year, according to FBI estimates. The Coalition Against Insurance Fraud reports that fraud accounts for up to 20% of claims costs for many property and casualty insurers. Fortunately, advanced technologies such as AI can help insurers stay one step ahead of fraud perpetrators. Coupled with tools such as predictive data modeling and analytics, AI enables insurers to satisfy some of the key requirements for successful fraud identification: early, swift detection and quick, comprehensive investigations. Despite all the hype around AI, however, insurers may not have a clear picture of how the technology works in the claims environment and how it fits in with existing processes and skill sets. The slideshow above highlights some considerations for evaluating the use of AI in your fraud prevention efforts.

How to stay one step ahead

There's one thing that never changes about fraud: It's always evolving. As soon as you find a tool to detect one type of fraud, perpetrators will find a new way around it or a new type of fraud to commit. Insurers need to continue fine-tuning their fraud prevention tools and models incrementally, as well as continuing to evaluate and incorporate new data sources. Fortunately, AI tools themselves can adapt to new circumstances and new fraud techniques, so they can assist in this effort to stay ahead of fraud actors. Still, as mentioned above, you should not leave out the human element: Insurers must continue to ensure ongoing, timely training for claims adjusters and underwriters in fraud prevention technologies and techniques. If you combine these valuable weapons, you'll have a powerful arsenal to minimize the impact of fraud on your claims costs and your bottom line. Joe Benson ([email protected]) is the claims offering manager at DXC Technology. With more than 20 years of insurance software and services experience, he offers expertise in litigation management, fraud detection and claims adjudication for the property and casualty and self-insured industries. See also:

• Leveraging AI provides a road map for claims executives
• Leveraging AI: A road map for claims managers – Part 2
• Leveraging AI: The future of claims adjusting - Part 3