Is Data Analytics a Magic Bullet in Insurance Fraud Detection?

The advancements in analytics solutions offer an alternative to the conventional means of insurance fraud detection.

FREMONT, CA: Globally, insurance fraud is a significant concern for Insurers, which continues to increase year by year. Insurers spend huge effort and manpower in detecting fraud. Now insurers are increasingly relying on analytics to refine insurance fraud detection in an efficient manner.  With the help of analytics solutions, fraud or potential for fraud is being detected much earlier in the insurance cycle, with enhanced underwriting checks as part of the solution.

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Fraud detection requires the collection and processing of massive data from claims, underwriting, law enforcement, and many more. The addition of data from several insurance verticals creates increased pressure on the fraud detection ability of the firms. Fraudsters are also eyeing third-parties as possible entry points to gain access to the data sets. Thus, insurance firms need to make sure that the potential vulnerabilities within the organization and relating to their respective third parties are covered.

Insurance firms have a massive collection of historical data. If there is a way to refine and analyze this data to get insights into fraud patterns, insurance firms can prepare to counter any incidents. Data analytics

 can also use technologies like artificial intelligence (AI) to extract insights from data sets that add to fraud detection efforts. Insurance firms can feed the AI-algorithms with the repositories of past data and generate insights to fight fraud attempts in the future.

Advanced analytics solutions can be implemented to capture real-time anomalies and derive conclusions by analyzing data. Further, the deployment of predictive analytics capabilities allows insurance firms to reduce losses by identifying frauds beforehand. Insurance firms realize the need for advanced analytics solutions to counter various frauds. Incorporation of a data analytics solution that addresses the security needs of an insurance firm will provide a competitive edge to the firm.

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