How insurers can counter fraud by leveraging analytics
What do success in the NBA and the fight against insurance fraud have in common? Both call for a dream team made up of synchronous parts. Whether you’re responsible for slam dunks and three-pointers or for predicting and detecting insurance fraud, you don’t have to wait for your opponents to come to you. Instead, go on the offensive to bring your team to victory.
One key to that victory is a bellwether IT solution that helps counter fraud in insurance and that isn’t so different from the most formidable basketball squads of late. You can take this approach to create your own dream team for fighting fraud.
Of the 30 teams that battle for the NBA championship title, the Miami Heat are a case all its own. Entering the league as an expansion team for the 1988–89 season, the Heat put up a mediocre showing for more than a decade, with only a single championship title to console its fans. But what changed in 2011?
In a landmark transition, the Miami Heat management put together a dream team that rivaled the marquee teams of its day. The Heat’s Big Three—Lebron James, Dwyane Wade and Chris Bosh—along with Chris Anderson and Ray Allen took the Heat to the NBA finals four consecutive years, clinching two championship titles. This run encapsulated a big moment for a team that emerged suddenly from obscurity to supremacy.
In the highly regulated and commoditized playing field that is the insurance industry, insurance providers face a full-court press of challenges that include fraudulent claims. These fraudulent claims can and do cost them dearly. The Coalition Against Insurance Fraud, a nonprofit group of insurers and consumer groups, conservatively estimates that fraud costs insurers $80 billion a year in stolen claims. Insurance providers may pass on some of these costs in the form of boosted premiums, but they ultimately feel the brunt of fraud’s effects when disappointed customers feel exploited and betrayed.
Claims leaders in many insurance companies struggle to strike a balance between stopping fraud and settling claims promptly. How can insurance providers use advanced analytics and disparate content—both in the enterprise and externally—to quickly and accurately identify and investigate suspicious claims? Success lies in bringing together the right set of rich analytics that can help vet the claims queue, classify claims by their severity and provide investigators with case content and dashboards.
Take the offensive
IBM offers insurance companies a unified package of best-in-class analytics for counterfraud management that addresses the entire fraud lifecycle, beginning with detection and prevention and then progressing to investigation and resolution. A multitude of advanced technologies are seamlessly interwoven to include entity analytics, context computing, predictive analytics, and forensic tools, such as social, behavioral, link and geospatial analysis, along with business intelligence (BI) and case management. This collection forms a dream team that can clinch victory after victory in the fight against fraud. This comprehensive solution is a testament to the adage: the whole is greater than the sum of its parts. In the long-standing crusade against fraudulent claims, this solution represents a big moment for insurers.
Put a game plan into action
Will you let fraudsters steal the ball from you, or will you implement your own full-court press to shut ‘em down? Learn more about how the Property and Casualty Claims Fraud for Insurance analytics within IBM Counter Fraud Management can help you detect, prevent and investigate insurance fraud. See it in action and discover how you can monitor caseloads and drive investigations forward by using a powerful dashboard to detect patterns of fraudulent claims. In addition, check out the New Counter-Fraud Strategies for the Insurance Industry podcast to learn more about threats from fraud in the insurance industry that modern insurance providers face. And discover what’s wrong with many traditional counterfraud solutions—and how IBM is helping customers detect, investigate and resolve incidents of fraud.