Auto Insurance Fraud

We signed up Permanent General Companies as our latest Scout client and are witnessing first-hand the enormity of auto insurance fraud.  A recent article in Insurance Networking News goes in-depth about the problem and the technology used to fight it. Excerpt below:

To lessen auto insurance fraud, insurers have options, from data mining to direct repair networks.

Fraudulent claims account for a small but significant portion of all claims received by insurers, costing billions of dollars annually. Insurance frauds are diverse, occurring in all areas of insurance. Their severity ranges from slightly exaggerated claims to deliberately caused accidents or damage.

Every insurer should realize that one in three auto insurance claims are potentially fraudulent

The enormity and frequency of fraud occurrence is greater at the claims stage than at the application stage.

TECHNOLOGY'S ROLE

Technology is the most reliable way to combat fraud. Some emerging technologies insurers should keep on their radar include the following:

• Transaction-based Profiling.
• Neural Networks.
• Data Mining

Of course having a great case management system like Scout helps to manage those investigations of fraudulent claims.  I guess that’s why we have several other auto insures kicking our tires…