Analytics and Claim Fraud

Some insurers used to accept fraud as a cost of doing business, more expensive to combat than to ignore. That attitude, however, has largely disappeared, due in part to the evolution of powerful analytical tools that help insurers identify fraud, act on it quickly, and direct potentially fraudulent claims to special investigation units.

Tools, however, are only part of the equation. In a business environment as challenging as the one insurers have faced in the last few years, the potential to reduce fraud losses—as well as the costs associated with investigating fraudulent claims—has become a very significant profit-and-loss item, one with a relatively rapid and attractive return on internal investment.