Whilst US based research the findings will be pretty universal. And startling stats covering home, auto, workers comp and more!
360Globalnet finds (from data covering over 1 million home claims in Australia, UK/Europe and North America) that 30% - 35% of policy holders withdraw home & contents claims in the first few minutes of a well designed FNOL process. Yes- over 30%
Claims that would have been paid out with STP because they seem bona fide. But when a claimant is asked to: -
- Describe the incident in text
- Show the incident with photo images
- Add context with video image joining the different parts of the incident scene
This process quickly throws up inconsistencies and the policyholder begins to see her plot unfold- all those ruses that usually include one or more of the following elements:
- Padding insurance claims or inflating a genuine claim
- Falsifying facts on an insurance application
- Submitting claims for damage or injuries that never happened, services never provided or equipment never delivered
- Staging accidents
The photos don't support the claim description. And/Or the meta data shows the damage photographed at a different date or, not uncommon, taken in a different location.
Or the video footage shows two 'connected' shots of damage were actually caused by different events.
Fraud is a big cost to insurers and modern digital claims management platforms will weed opportunistic fraud out very cost-effectively.
When it comes to the professional fraudster it requires additional fraud solutions but bear in mind that 95% of insurers in the linked article stated that they deployed such products.
One potential reasons for limited effectiveness is the huge proportion of unstructured data hidden in data and system silos. Without a solution like 360Retrieve that can access, match & join and ingest the complete data view into fraud solutions they will always be ineffective.
Good data management and analytics are always at the heart of effective solutions.
Look at statistic 28 in the linked article: -
"28. 61% of insurance companies associate the increases in fraud with difficult economic times.
(Fair Isaac Corp.)"
In a survey conducted by FICO in 2012, insurers predicted that the increasing cost of insurance frauds will have the biggest impact on personal property, workers’ compensation and auto insurance. In terms of fraud by different lines of insurance, 67% of insurance companies anticipate an increase in personal property fraud, 65% suppose that the number of workers’ compensation scams will increase, and 60% foresee a rise in personal auto schemes.
Don't be put off by the 2012 date. Research by Gartner and other sources say that this is a threat in the current Covid-19 period. Financial distress and hardship leads to more fraudulent claims.
Anticipate that and act now.
29. Insurers discharge at least 10% of their claims costs on fraudulent claims every year.(Fair Isaac Corp.) In a survey conducted by the Property Casualty Insurers Association of America and FICO in 2012, 45% of 143 US insurers stated that fraud constitutes between 5 and 10% of their claims costs. However, US insurance fraud statistics also show that for nearly one-third of insurance companies fraud costs were up to 20% in the same year.