You would be surprised by what fraud bosses know about your underwriting and claims operations and team members. This RIMS 2016 session discussed current trends and developments for detecting fraud and shutting it down.
- Stephen Truono, VP, Global Risk Management, Starwood Hotels & Resorts Worldwide, Inc.
- Tom Mulvey, Assistant Vice President, ISO/Verisk
- Kenneth Jones, Vice President of Investigative Services, The Travelers Companies, Inc.
Investigative departments are becoming better trained, with programs built around data and analytics. They are traditionally comprised of around 65% law enforcement, combined with other roles like claims professionals and analytics professionals.
Companies are starting to make more savvy use of technology to capture and analyze data to determine trends. There are several examples. Today, with digital technology, there is now the ability to track individuals on closed circuit television frame-by-frame with resolution that makes fraud investigations much more effective. Social media is also used as a tool. Companies are now able to draw up a “geo fence” over an event and monitor social media chatter to help mitigate incidents.
It is critical that risk managers and SIU professionals work hand-in-hand to determine between fraudulent incidents and real injuries. Insurance fraud is becoming highly organized. For instance, individuals are organizing slip and falls to try to get a settlement. Something that is also emerging is renting trucks and backing up to hit someone. Professional ADA claimant’s also exist, going into public properties and creating ADA-related “accidents” on the premises if the business is not ADA compliant.
These schemes are highly organized and those committing the fraud are pushing for a quick settlement. If the claim is made, you can investigate past claims to help determine this pattern. Predictive analytics are entering the arena to identify certain trends in claims. Through data mining, “professional claimants” that know how to work the system can be flagged. Alternatively, it also could help legitimate claimants get their settlement more quickly. This information only exists if the incidents are documented. Without a record, businesses and investigators are at a complete disadvantage.
The investigative function doesn’t always necessarily create the control to present future fraud. There should be an incentive for claims professionals that suspect fraud is involved to send the file to investigators for a closer look. Often that does not happen because they are trying to close the claim quickly.
“The Internet of Things” (i.e. the ability for all of our devices to connect and talk to each other) is also becoming a factor. This is adding additional sources in the risk, insurance and investigative worlds. There’s a ton of data and it’s a challenge for organizations to determine how to turn that into intelligence, but this will be the future of fraud detection.