KEY TAKEAWAYS:
--Taking the mass amounts of data that customers have and connecting all the dots into a single view is the first thing advanced AI can help insurers to achieve.
--Insurers can then spot industry trends that lead to vulnerability, identify behavioral patterns that point to fraudulent activity and stop wasting time on false leads.
----------
Worldwide inflation is back -- and interest rates are playing catch up. This affects everyone. Businesses. Consumers. Employees. The government. And financial pressure means there is an increased chance that some will partake in illegal activity.
They may look to claim across business lines, making claims that were never needed in the first place. In some instances, some may even make the same claims twice.
Almost more threatening than customers taking advantage is potential for insider involvement. Those who know the ins and outs of the system are much more dangerous. Employees and customers alike may see these crimes as victimless, falsely believing they are taking from faceless corporations. The catch is that insurance fraud depletes funds and forces honest customers to pay higher premiums, creating victims oblivious to the crime.
These crimes often come in the form of digital minds being used to bypass application controls through fast and clever identity switching. Without the technology to interpret these duplicates and paint a single view across all brands and channels, hidden connections will stay hidden and fraud is made possible.
The FBI estimates that fraud costs the average family between $400 and $700 a year in premiums alone. Insurance companies have access to masses of data that is getting harder to protect as fraud crimes advance and their set of challenges increases.
For one, the unfathomable amount of data that businesses have access to allows risk to hide in the reeds. Insurers can no longer rely on rules-based AI models to detect fraudulent behavior, because digital automation has increased, and data is more complex than ever.
According to the Coalition Against Insurance Fraud, fraud costs business and consumers more than $300 billion a year.
Why is the insurance industry so vulnerable? For one, insurance is not homogenous. The industry changes drastically across sectors and has access to data from various parties. Many big insurers have customers in many industries, but also insure personal assets.
See also: How to Balance CX and Fraud Detection
Insurance companies that operate globally have to deal with the intricacies of the industry around the world -- and data from every corner. Companies need to fit into the landscape of each of their globalized markets but fraud looks different everywhere.
There's only one answer to fight fraud in the current climate: Insurers must arm themselves with the right technology. Centralized and contextualized risk management is how insurers can get ahead of fraud against a backdrop of economy instability and crime.
Paint a single view of your customers
Taking the mass amounts of data that customers have and connecting all the dots into a single view is the first thing advanced AI can help insurers to achieve.
One streamlined data foundation will give insurers a contextualized view of the business. It allows them to:
- Spot industry trends that lead to fraud vulnerability or security weaknesses -- If insurers can look at their customers as a single entity against the backdrop of their industry, they'll be able to compare notes on competitors and better protect their customer.
- Identify behavioral patterns that point to fraudulent activity -- Individual and group behavior is becoming harder to identify as fraud technology advances. Picking out patterns from behaviors across companies will allow for bigger-picture insights.
- Clarify the difference between opportunity and risk within these behavioral anomalies -- Bigger-picture insights can actually lead insurers to being more precise. Insurers can stop wasting their time on outliers and start seeing risk more clearly.
Once companies are able to sift through data in this single-view contextualized way, they'll be able to mitigate risk. The most valuable thing that new technology can give insurers is the ability to predict. Being proactive rather than reactive is incredibly important in times like today.
See also: How Blockchain Can Disrupt Insurance
Ease decision making
Given that insurance fraud and the advancements in economic crime changes constantly, it's difficult for individual business leaders to keep up.
The only way to fight advanced fraud and financial crime is by applying more advanced tech. Decision intelligence does just this by allowing insurers to focus on client services and not spend countless hours prying through potential risk anomalies and figuring out how to act. Intelligent platforms are available to make the decisions efficiently and accurately.
Global insurers must rely on intelligent platforms to make the difficult, high-level decisions that come from extortionate amounts of data. Providing humans with the right data and right technology allows them to make the right decisions. AI is not making the decisions, but automating processes to empower humans to make accurate and timely choices.
Insurers will find themselves less and less capable of facing fraudulent activity if it's concealed within a dark cloud of difficult decisions and data -- it needs to be uncovered.
The future of fraud is here, but it brings the future of fraud protection, too. As criminals are using increasing complex and sophisticated techniques and the economic climate continues to worsen, insurance companies must arm themselves with the right technology to win the battle.
