FRISS, an automated fraud and risk detection solution for P&C insurance companies, has found insurance carriers are putting focus on fraud prevention through a new survey.
The 2018 FRISS Insurance Fraud Survey was formed of responses from 150 industry professionals and was aimed at highlighting opinions in the market to fraud detection and mitigation.
Insurance fraud in the US alone lost insurance carriers around $34bn in 2017, and the problem is rising, the company claims. However, big data analysis and large-scale collaboration are a major way to combat the threats.
One of the key findings from the report was that the quality of carrier’s data has become increasingly important. Of those to take part in the survey, 45 per cent stated the quality of fraud data collected was a challenge, compared to 2016, when only 30 per cent saw this as a key challenge.
Reasons given by respondents around the data were that too little information was available or poor-quality information disrupted the process of effective analysis. By having good data, insurers can improve customer experiences by shortening acceptance and claim processing times.
The survey also found that there is a growing belief that exchanging information between insurers is crucial in fighting fraud.
More consumers are requesting quotes or buying policies online and in this environment, it is important for carriers to have immediate access to quality data to make decisions on who to insure. The problem is that a many cannot access it. Third-parties can collate publicly available and shared data from other insurers. This includes false claims, unreliable repair shops and health professionals, imagery and information about insured assets.
However, this was not readily done due to fears of competition. The survey from FRISS has found this attitude is changing, with a third of respondents believing sharing is integral to beating fraud. Sharing fraud data means insurers can work together to identify and protect themselves.
Many of the respondents noted this as a challenge, with the newly launch GDPR regulation contributing to difficulties.
A final finding from the survey was that insurance companies are increasingly looking towards automated fraud detection solutions. According to FRISS, more than 60 per cent of insurers have automated fraud software for real-time detection, and from doing so have better loss ratios, portfolios and claim investigations.
It also states that although 86 per cent of insurers believe their systems are up-to-date, more than half find it difficult to ensure their platforms are difficult to maintain. Of the respondents, 43 per cent stated difficulties with data integration and are affected by too many false positives.
While there is increased interest in the industry for fraud prevention, FRISS believes that more still needs to be done.
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