Home Finance How Technology Can Help Battle Insurance Fraud

How Technology Can Help Battle Insurance Fraud

Battle Insurance Fraud

Insurance fraud may not seem like a huge problem, but according to the FBI, insurance fraud costs more than $40 billion each year in the United States alone. Some of this fraudulent activity may be reflected to policyholders as higher premiums. This means that both insurance companies and policyholders may experience the negative impacts of fraud. What exactly is being done to combat this problem? Thankfully, new and emerging technologies are being used to fight fraud.

Preventing Data Breaches

One of the most common ways that fraud happens is when data breaches occur. The key to preventing insurance data breach is by having a plan in place. Companies can develop their own plan or use a third-party security team to develop a plan. The plan will assess risks and threats, secure data, invest in backup, and outline exactly how to respond in the wake of a cyber attack. A thorough plan will minimize the damage of an attack while maximizing the ability to resolve and recover.

Automated Red Flags

Automation is a technology that’s heavily used in insurance companies today. With automation, red flags indicate a claim that may be odd or raise a concern. They can be raised for a number of potential problems. Claims made after a change in coverage, no receipts for expensive claims, and other countless red flags can be automated and used to bring attention to investigators and agents. While additional investigation may be needed, automation will help to alert agents to which claims need to be investigated.

Chatbots to Speed Up Processes

Customer assistants can be used to speed up claims processing. Today, individuals and companies can submit their first notice of loss by following the instructions of chatbots. This means that the first step of processing a claim can be done immediately without needing the involvement of a human expert. The chatbot will alert customers to take photos and videos of any damage. Not only does this prevent fraud by providing less time to change data, it also helps to make the entire process more efficient.

Assessing Loss Costs with Computer Vision

Computer vision models can be used to infer meaning from visual input such as an image or video. The models will evaluate the data to estimate a first notice of loss. This provides the insurance company with information on the repair cost of the damage. This can be used to prevent inflated repair claims where fraudsters may use false invoices to get more money from the insurance company. A computer model won’t give an exact amount of money but will provide a general estimate. This can also be a part of the automation process where an alert is triggered when the repair is much more than the estimated amount.

Finally, technology in the insurance industry is always changing and growing. Companies are learning how to best protect their customers and keep overall costs low by preventing fraudulent claims and losses of data. These are some of the promising technologies being used today by some of the top insurance companies in the world.

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