Insurance Fraud: Part 2 -How can Smart Systems prevent fraud
This is the second entry in our series on Insurance Fraud. In our last post we covered what insurance fraud is. In this entry you will learn the benefits of using smart systems to prevent fraud.
How can Smart Systems prevent fraud? The Coalition Against Insurance Fraud summarizes the relation between artificial intelligence and insurance fraud by stating:
“Digitalization (56%) will have the biggest influence on changing fraud patterns, ahead of the economy (33%) and organized fraud (11%).”
Modern times have forced insurers to increase claim automation. Unfortunately, as automation increases insurers become more vulnerable to fraud. Perpetrators are constantly looking for insurers with inefficient fraud protection.
Investing in fraud protection will guard against high legal fees and other avoidable costs that come with insurance fraud attacks. These protective systems also optimize daily tasks freeing up time for other duties.
Are there indicators of insurance fraud?
The publication RGA released an article titled “Don’t Ignore Fraud’s Red Flags: The Key to Fighting Fraud is Preventing It” (https://www.rgare.com/knowledge-center/media/articles/don’t-ignore-fraud’s-red-flags-the-key-to-fighting-fraud-is-preventing-it) analyzing the way people commit fraud. Common features of these scams are:
- Misspelled names and addresses
- Addresses associated with a trailer park
- Similar locations across the United States
- Inconsistencies in height, weight, license numbers or Social Security numbers and signatures
Smart Systems can help Preventing Fraud
Digital systems can help prevent fraud by:
- Detecting inconsistencies
- Eliminating paper (red flags are easier to detect in digital documents)
Keep reading our series on Insurance Fraud! Our last entry explained “What is insurance fraud” On the next entry, five tricks to prevent insurance fraud.