Insurance fraud is an expensive and tricky problem to tackle - it’s hard enough just to find consistent statistics on its total cost.
Estimates from the Coalition Against Insurance Fraud put the annual losses from fraud at about $80 billion, spanning all lines of insurance, with the largest fraction of that coming from property casualty fraud at $32 billion annually.
The Coalition also pointed to the increasing complexity and interconnected nature of modern insurance fraud schemes. For instance, 84 percent of the organizations said the fraud cases they’re investigating span multiple industries, and 61 percent stated these investigations had a “severe impact.”
Meanwhile, a 2016 LexisNexis study on fraud mitigation highlighted the highly technological and sophisticated nature of modern fraud operations. The types of fraud schemes that generated the greatest concern were identity theft (49 percent), hacking and software fraud (45 percent), and internal fraud involving employees and agents (37 percent).
By the far the largest spending priority to stop fraud was upgrading IT systems, which 27 percent of the surveyed insurance organizations said they would allocate funds to before any other priority.
Fortunately, big data analytics solutions are the newest weapons in internal investigators’ arsenals in the battle against fraudulent claims and actors. A survey from WNS Decisionpoint found that employing big data analytics resulted in a number of positive impacts, including 66 percent of firms who cited:
Part of the reason insurance fraud can be so hard to catch - and why big data represents such a powerful tool - is the complex web of data that must be analyzed for successful fraud investigations. Not only do you need to monitor data streams like medical and police reports, but also ISO claims data, billing information, social media monitoring and others. To conduct a truly effective investigation, you must also cross-reference these diverse data points to create coherent and comprehensible narratives.
Visallo’s big data investigative capability grants you the capacity to both handle large amounts of data and identify connections between those datasets in an accurate and timely manner. The platform also sorts, aggregates and visualizes using a variety of methods including maps, link charts and graphs.
With Visallo’s big data analytics, insurance claims investigators can collaborate in real-time, while privacy controls let these professionals share the most important insights with other departments. Furthermore, customized privilege levels allow administrators to decide in advance how each user can manipulate and access data sets.
In the modern era of fraud detection and investigation, manual investigations simply cannot keep pace with increasingly broad and sophisticated schemes. The link analysis power of Visallo unleashes the experience of investigators on a much higher volume of issues without sacrificing quality or performance.
Starting to think that stronger big data analytics is the solution to your insurance fraud challenges? Check out our new eBook or contact us to schedule a demo and see why our system is right for you.