Insurers write close to $1 trillion in insurance premiums each year according to the FBI — that's a lot of risk management and a huge opportunity for some claimants to take advantage of an insurance company. Fraud comes in all shapes and sizes. Non-healthcare related fraud runs well over $40 billion a year, costing the average American family somewhere around $400 to $700 a year in increased premiums.
The National Crime Insurance Bureau says that Workers' Compensation fraud accounts for approximately 25 percent of the fraud perpetrated annually or $7.2 billion. And the U.S. Government Accountability Office says that healthcare related fraud costs insurers well over $50 billion a year.
Fraud is definitely big business — whether it is fraud rings operating in Florida, Texas and California; Workers' Compensation fraud occurring in companies across the U.S.; or failing business owners who think torching their companies for the insurance payout will solve their problems — no one is immune and everyone is affected.
Insurance companies are becoming far savvier when it comes to identifying, capturing and prosecuting these fraudsters. In its recently released 2015 Fraud Mitigation Study, LexisNexis found that 84 percent of fraud mitigation professionals see fraud crossing over multiple industries and they see value in being able to access data about cases from other organizations. Seventy-seven percent said that fraud mitigation cases that are connected to other industries can have a moderate or even high impact on their organization. And 87 percent agree that there is a need for a universal and consistent way to define fraud across multiple industries.
Insurers who share their fraud data within the industry are seeing the benefits of having a wider view that allows them to see pockets of fraudulent activity in different areas. Data analytics and a number of technological advances are giving them the tools to flag claims that have the earmarks of fraud, track specific types of claims in a particular geographic area and share the information with their special investigative units for further analysis. Insurance companies are working with the FBI, states attorney generals and local law enforcement officials to capture these perpetrators and put them out of business for good.
Fraudsters beware: Insurers are coming for you.
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