Insurers are increasingly relying on technology to counter fraud

Insurers are increasingly relying on technology to counter threats, such as underwriting scams, money-laundering and cyberfraud, according to a study by the Coalition Against Insurance Fraud.

The report said the use of anti-fraud technology was on the rise as firms are beginning to realise positive returns on investment. Dennis Jay, the Coalition’s executive director, said: “Technology is playing a larger and more trusted role with insurers in countering growing fraud threats. Software tools provide the efficiency insurers need to thwart more scams and impose downward pressure on premiums for policyholders.”

The study also found that nearly all insurers (95%) said they now using anti-fraud technology, compared to 88% in 2012. “Insurers are investing in different technologies to combat fraud, but a common component to all these solutions is data,” said Stuart Rose, global insurance marketing principal with the Coalition’s study partner SAS. “The ability to aggregate and easily visualise data is essential to identify specific fraud patterns.”

The report added that although advanced tools such as predictive analysis and geo-mapping are helping, their deployment is far from widespread use among insurers. It said that while most insurers (81%) use basic tools such as automated red flags/business rules, far fewer are deploying technology such as link analysis (50%), predictive modelling (43%) and text mining (43%).