Insurance Fraud is one among the highest challenges that insurers face worldwide. While there are pricing pressures due to slow economic environment, curtailing the Claims payout is one among the simplest means to extend efficiency and cut cost.
their unique selling proposition.
This article is an attempt to spotlight five key areas that ought to be considered when building an efficient Fraud management strategy.
1. Underwriting Prudence
There are several indicators which will raise suspicion during the underwriting process. After the Claims are settled, the Claims data can positively impact the underwriting and rating functions. there's a requirement to include more information into the underwriting decision-making process. The responsible use of knowledge and knowledge during the underwriting analysis is one among the foremost powerful weapons against Fraud. The organization should know its prospective customers well to seek out fraudulent intentions beginning the review of sales proposal. an effort should be made to dig deeper to verify identity and each application must be individually scrutinized. The goal of reducing Claim leakages should be kept in mind from the very beginning and therefore the Fraud fighting mechanism should be activated from that moment.
Management From a Fraud perspective, effective management of First Notice of Loss (FNOL) process is crucial for the insurance firm .
There are key factors for instance , who reports the Claim (Claimant vs. Attorney Vs.
Delayed reporting); and therefore the manner during which Claim is reported which will raise suspicion on the genuineness of the loss.
If the choice to form an SIU appointment is late, the insurers can lose important eyewitness which will affect the Fraud analysis and therefore the recovery possibilities. Any time lost during this stage will cause quite fourfold efforts, time and price within the future. To fight the Fraud in an efficient manner, insurers need to be wiser and faster as compared to Fraudsters. the utilization Data Analytics to narrow the possible number of Claims to be investigated for Fraud is significant . The insurers can then concentrate to those Claims, where high probability of Fraud exists.
3. Developing an efficient
Claims Team Effective deployment of resources is a crucial a part of the general Fraud management. Any organization that desires to effectually handle Fraud, must rebuild the Fraud investigative skills and capabilities. It should hire people with solid investigative skills to create a robust SIU unit for Fraud handling.
The employees should be equipped with the required resources and a well-defined educational program should exist.
Claims people should encourage feedback from the Claimants as a top quality improvement tool. There should be a seamless link between Claims personnel and underwriters to form sure the general business perspective is maintained and followed. The aging of the baby boomers and therefore the lack of skillful resources is leading to heavy reliance on automation and investment in IT.
The goal of containing Claim leakages and rebuilding investigation skills and capabilities can't be met unless the organization features a well laid out and forward-looking re-sourcing strategy.
4. Use of Technology One of the issues being faced by
Claims Organizations lately is that the increased use of manual processes with limited use of tools and technology to manage processes. it's often found that the Claims Division in an insurance organization is one among the departments that are working with less-than optimal systems with huge maintenance cost. the necessity of Advanced Technology and Analytics within the Fraud handling can't be over emphasized.
With the amount of individuals using social media sites, increasing day by day, the insurers should even consider social network analysis. the mixing of Claims systems with social networking sites can convince be an efficient tool for Fraud detection.
The automation of the decision-making process supported business rules also can help in streamlining and standardizing the Claims process.
5. Information Sharing Often it's found that different functional areas within an insurance organization don't talk well with one another . Thus, there's a greater got to strengthen data sharing between various departments specially, Underwriting, Claims and Finance. There could be similar Fraud patterns and issues across other lines of business, like Workers' Comp, Commercial Auto and Crime. Having access to seem across different coverage types for common behavior are going to be critical to success when combating Fraud. Besides, the businesses should collectively work towards the upkeep of Fraud databases to possess all the knowledge in one place.