How can Insurance Fraud Be Prevented?

CIO Applications| Monday, March 02, 2020

Technology can help insurance companies increase resilience against fraud by flagging risks in a timely manner.

FREMONT, CA: Fraud is a serious problem in insurance that has gained increasing attention in recent years. Insurance fraud costs insurers billions of dollars per year and making it imperative for insurers to take a proactive stance against fraud. Insurers should develop a technology framework, tap into advanced automation and analytics, and take steps to prevent it.

Using advanced monitoring and detection technologies are important for optimizing insurance fraud discovery process. Manual detection systems are not effective anymore, as the fraud landscape has evolved very much. Insurers with cybersecurity tools that enable automated monitoring of critical operations and create alerts on detecting vulnerabilities allow timely detection of frauds. Driven by intelligent algorithms that feed on data to enhance results over time, modern threat detection capabilities are a must-have for insurers.

Fraudulent insurance claims that have already affected the industry over the years can be very useful in helping insurers understand the pattern of risk. Industry-wide claims data from various sources can be fed into machine learning-powered solutions to identify vulnerabilities that resulted in fraud. With this factual and actionable intelligence, timely detection of insurance frauds becomes considerably easy.

Various technologies can be applied to address the issue of fraudulent claims. One of the most powerful technologies in this context is predictive analytics. With predictive analytics, insurance companies can filter claims and then predict risks. Other intelligent screening solutions can also bust fraud attempts before they cause serious negative impacts to insurance companies.

Companies can use various technology approaches to combat fraud. But insurers must never forget that their focus should not only be on the technology they use but also on the workers in the offices.