By Gurbani Singh
22 April 2022
What comes to mind when you read the word ‘insurance’? If your first thought wasn’t technology, it should be.
The insurance industry is on the verge of a seismic, tech-driven shift, as outlined by a 2021 McKinsey Report. The report anticipates that in a few years’ time, we’ll be able to enjoy personalised, fully digitised services that will make insurance very much a part of our daily lives.
Thanks to technology and data, consumer services are more convenient than ever. Harnessing the power of data and artificial intelligence (AI), we’ve already streamlined business practices in ways that weren’t possible a decade ago or even a year ago. Today, customers expect and deserve a level of personalisation and accuracy that can only be powered through data.
Let’s take a look at insurance fraud detection.
Insurance fraud is when someone deliberately deceives their insurer for financial gain. This ranges from omitting key information, to staging or exaggerating accidents and incidents.
You may think nothing of it but according to industry experts, it’s costing Kiwi insurers almost $740 million each year, and guess who’s paying the price? This cost has to be covered somehow so, it’s all customers, honest or not, who end up paying higher insurance premiums as a result.
Unsurprisingly, the insurance industry has been battling fraud, while also trying to reduce the rate of genuine claims wrongfully flagged as suspicious, to ensure claims are processed quickly.
Most insurers have dedicated fraud teams but it’s a time-consuming process identifying each claim as genuine or fraudulent. It’s also expensive, because reviewers have to be trained and retrained every time there’s a new type of scam. Plus, humans are also prone to errors and each person’s eye for detail is different. This is neither standardised nor scalable.
This is why fraud analytics is a huge breakthrough. Having an automated process that separates low fraud risk claims from the rest of the pile, significantly speeds up the process and enhances accuracy. By inputting historic data on genuine and fraudulent claims, an AI tool, using machine-learning, can sift through new claims in seconds, detecting fraudulent and genuine claims in real-time.
Customers love that their claims are dealt with fast and with less hassle, but it’s also hugely beneficial for our people and business.
Insurers with automated fraud detection systems can also harness real-time data to respond swiftly as new scams are detected, mitigated and prevented. It brings more transparency into how claims are processed, which simplifies insurance for everyone involved.
In 2021, Tower partnered with FRISS to automate our fraud detection process, allowing the scoring of each claim in a matter of seconds, fast-tracking genuine claims to be processed immediately.
Technology really is at the heart of modern insurance. Using the latest technology, we’re thinking ahead to provide customer-focussed, digital-first insurance solutions for Kiwis and Pacific Island communities.
Gurbani will be speaking at Tower’s TechWeek 22 event ‘Insurance powered by data – how data is changing the insurance game’, May 19.
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