Battling fraud in the digital age with data-driven solutions

Originally published by Digital Insurance on August 6, 2024.

Fraud costs insurers and policyholders $308 billion annually, with digital technologies enabling fraudsters to exploit new vulnerabilities faster than carriers can address them. While online interactions reduce adjustment costs, they also eliminate face-to-face verification, making inconsistencies harder to detect and demanding more robust data strategies from insurers.

Tom Rasmussen, VP of Product for Claims at Carpe Data, argues that integrating advanced intelligence from publicly available online sources allows insurers to accelerate time to resolution while better anticipating emerging schemes. Traditional manual searches of social media and the web are inefficient and inconsistent, but data-driven solutions using sophisticated AI algorithms can predict where relevant information resides, freeing adjusters to focus on core responsibilities like investigating coverage, determining liability, and negotiating settlements.

Real-time alerts powered by data-informed insights enable early intervention when suspicious activities arise. Rasmussen cites a UK-based customer whose policyholder claimed a stolen £7, 800 Rolex during an armed robbery. Industry-wide searches quickly revealed the claimant provided conflicting information and faked sales invoices for second-hand vehicles, leading to immediate policy termination. The same customer saved £15.5 million across fraudulent property claims in one year, averaging £19, 058 per identified case.

By identifying fraudulent activity before payouts are issued, data-driven solutions help carriers minimize operational costs while maintaining claims process integrity. "The goal of integrating new and better sources of data is to identify fraudulent activity before a single payout is issued, " Rasmussen writes. Read the full article at Digital Insurance.