Fraud is a major concern for insurers worldwide and costs UK insurers alone £1.9 billion per year. Insurance fraud can include exaggerating claims, using forged documents, and providing fraudulent information in applications. Experts note that insurance fraud is rising during economic recessions. Business intelligence techniques like predictive modeling, neural networks, profiling, and analyzing claims databases can help insurers successfully mitigate fraud using technology. Data protection and privacy are also important to consider when managing fraud.

1.
Fraud Management
FRAUD – Is a major area of concern in Insurance and Insurers world over are
trying to tackle it.
Did you know that ‘In UK alone undetected general insurance claims fraud
total £1.9 billion a year adding on average £44 to the annual costs individual
policyholders face, on average, each year’.
Fraud in the insurance world includes Exaggeration, Forged documents and
Fraudulent Information during proposal/application filing. Experts say that
insurance fraud is rising during this recession. In the second half of 2008, auto
fire insurance claims rose by 6% after years of little change, according to State
Farm Insurance. Dennis Schulkins with State Farm’s special investigations unit
told The Kiplinger Letter that “Indiana, Michigan and New York are hot spots,
with burned car claims spiking 13% to 18%.”
Business Intelligence can be leveraged to deal successfully with fraud
mitigation using technology by applying a combination of several methods ‐
including the typical red flag approach, predictive modeling, neural networks,
profiling, claims databases and identity matching. In fact, behavioural analytics
is a key part of Fraud Detection and Mitigation, pretty much like one used in
detecting passenger data while by International Flight Carriers.
Data Protection and Privacy are also a gaining ground to manage this and EU
has now declared a limited list of certain White Labeled countries and regions
where data can be stored.