More than half of insurers surveyed now use anti-fraud technology solutions, according to “The State of Insurance Fraud Technology: A study of insurer use, strategies and plans for anti-fraud technology,” from the Coalition Against Insurance Fraud and SAS. However the study found that while the majority of respondents (79 percent) said that special investigations units are the sponsors of anti-fraud projects, other departments typically control the project budgets, which could slow the implementation of the technologies, the study said.
Additional highlights from the report:
• 88 percent said they currently are employing anti-fraud technology. Less than half, however, are using technology for non-claims functions, such as underwriting fraud.
• Slightly more than half of insurers surveyed said that had been using anti-fraud technology more than five years.
• Three most common technologies employed are red flags/business rules, claim scoring and link analysis.
• 40 percent use text mining as an anti-fraud tool.
• 52 percent said the major benefit of anti-fraud technology lies in uncovering complex or organized fraud activity.
• Biggest challenges in deploying technology insurers cited were lack of IT resources and determining the cost-benefit analysis.
• 31 percent report that they expect increases in technology budgets next year. Predictive modeling and text mining are the top two areas in which insurers are looking to invest in the future.
The biggest challenge in deploying fraud technology, according to the report, are: lack of IT resources (38 percent); return-on-investment (36 percent); proof of concept and unknown effectiveness (14 percent); acquisition and integration of data (7 percent); legal and compliance issues (5 percent). The report further examines the sophistication and deployment of fraud detection technologies.
