According to the 2022 report on insurance fraud, real-time data is a valuable asset in the fight against fraud.

A 2022 study by FRISS highlights the importance of real-time data to ensure end-to-end protection against risk and fraud.

Mason, Ohio, March 17, 2022-(BUSINESS WIRE)-A recent study by FRISS, the world’s most widely deployed fraud, risk and compliance solution for non-life insurers, shows insurers as they work to prevent fraud. Challenges and opportunities are highlighted. The survey targets more than 400 insurance professionals around the world and provides insights into issues such as fraud, data challenges, and process automation.

Survey respondents have different views on the challenges and benefits of fraud detection software solutions. However, a common theme emerges. Data challenges. From underwriting to billing and special investigation. The challenge is to abuse the data fast enough to respond effectively when fraud is detected. Earlier biennial FRISS surveys show that insurance professionals are suffering from inadequate data, such as poor quality internal data and restricted access to external data sources.

Main findings:

Pandemic has accelerated digitization

COVID-19 will have a long-term impact on the insurance industry, primarily because the pandemic has accelerated the digitization of processes. As research by EY and Aite-Novarica shows, insurers need to keep up with technology by digitizing core processes, moving to the cloud, and adopting flexible sourcing models. Insurers are taking a multi-layered approach to minimizing the risk of fraud, and improving upstream protection during underwriting is definitely an area to explore. As these trends continue, insurers are in a better position to leverage digital tools to combat fraud in all respects.

Scammers continue to be creative

It is always difficult to say exactly how fraud will affect the industry. But in the United States alone, fraud is stealing at least $ 80 billion from US consumers, according to the Coalition Against Insurance Fraud. Therefore, the creativity and sustainability of fraudulent claims is a threat that insurers should take seriously. Fraudsters continue to crack down on insurance companies, make tireless efforts to exploit new loopholes in the system, and only increase the cost of honest consumers. For 41% of respondents, keeping track of the scammers’ tactics was the biggest challenge to ensuring an effective response. The main mechanisms of fraud that increased last year were false declarations of personal injury, non-disclosure of relevant information, and counterfeit accidents.

Industry insiders generally agree that fraud accounts for about 10% of the total cost of billing. However, a notable change from the previous investigation is the increased proportion of alleged fraudulent claims. In 2021, suspicions of claims containing potential elements of misrepresentation or fraud increased by 20%. This is the increase FRISS predicted in a previous report.

Data plays an important role in the fight against fraud

Keeping the right data in the right place in real time is the key to improving fraud detection. Because many insurers use digital processes for almost every business, the ability to have real-time data to identify potential fraud has proven to be very beneficial throughout the life cycle of an insurance policy. I am. .. The challenge is to be able to quickly and effectively exploit the data when fraud is detected. Earlier biennial FRISS surveys show that insurance professionals are suffering from data deficiencies such as inadequate internal data and restricted access to external data sources. Again, some of the key challenges in the fight against fraud are data protection and confidentiality, internal data quality, and inadequate access to external data.

Optimization is at your fingertips

The future of fraud detection requires the use of advanced technology to support accurate real-time mass modeling of billing and underwriting fraud. Fortunately, respondents believe that fraud detection software offers significant benefits. These include:

  • Loss rate improvement mentioned by 59% of respondents

  • Beyond the fraudulent scheme mentioned by 53% of respondents

  • Improving investigator efficiency, mentioned by 52% of respondents

A hybrid approach of human expertise and predictive models is essential to prevent losses. This eliminates avoidable and error-prone steps, reducing underwriting and billing management costs and enabling you to discover suspicious behavior patterns in your data. Such an approach not only enhances the results of existing data, but also provides insurers with an advantage in identifying evolving fraudulent schemes. With FRISS, businesses and individuals can thrive and realize their dreams if insurance becomes more transparent and everyone can pay fair premiums that don’t inflate at the true cost of fraud.

Find all the trends in the 2022 report. Download the full report here.

About FRISS

FRISS is 100% focused on automated fraud, risk and compliance solutions for non-life insurers around the world. Our AI-powered solutions are available for underwriting, billing, and UES, supporting comprehensive end-to-end digital processing.

With more than 300 deployments in more than 40 countries, FRISS is considered a trusted advisor, ensuring secure digital transformation for all customers and tailoring their solutions to their specific needs. Insurers can expect products that add value quickly with seamless integration.

Now raising $ 65 million from the 2021 Series B funding round, FRISS can continue to provide clients with cutting-edge technology to guide insurers through evolving fraud. For more information, please visit www.friss.com.

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