Motor insurance fraud is becoming an increasing phenomenon. Currently, close to 1 in 3 people believe they have faced some form of insurance fraud. This could range from falling victim to a staged car accident-causing vehicle damage, to people faking injuries after an accident, to towing scams and other frauds mainly conducted by mechanics. The wide range of these accidents has meant that insurance companies need to actively work to protect their interests against these fraudulent claims.
Consequences of Insurance Fraud on Insurance Companies and Policyholders
The presence of instance fraud claims leads to higher costs for insurance companies. In part, this is because they will need to investigate cases more before they can issue the necessary payments. This higher cost of the investigation is directly felt by honest policyholders who will often see their insurance payments go up. As such, effectively combating insurance fraud is necessary for companies that want to remain competitive and offer good prices to their clients.
5 Tactics Insurance Companies Can Use to Minimize Fraud Probabilities
1. Use of technology to combat fraud.
One of the most effective means of combating fraud is through the adoption of data technologies that cut the time needed to recognize fraud. Artificial intelligence can be used to uncover fraud before a payment is made. this newer technology is employed when claims are first filed. Suspicious claims are flagged for further review, while those with no suspicious elements are processed normally.
2. Rely on AI over Traditional Fraud investigations.
AI can bring many benefits to motor fraud investigations. For the most part, the benefit of using AI is that it is both cost and time-efficient. Digital systems that can detect discrepancies in the fraud claims made, or even more so that can point out similarities between different cases can help complement traditional fraud investigation by providing insight on where to look and what to look for. This helps reduce the time any investigator will need to spend on finding fraudulent insurance claims.
3. Automate Claims for Lessened Damages.
Many people fear that automation might lead to more fraudulent insurance claims, however that doesn’t appear to be true. In most cases what automation does is allow clients to submit the details of their claims at a much faster time frame by uploading data online or through an app. Automation solutions optimize claims workflows, enhance efficiency and improve customer experience. Companies can process more claims faster, and the number of detected fraudulent and incorrectly adjudicated claims goes up. The more fraud you can detect, the lesser damages you can expect to payout.
4. Consider Artificial Intelligence in Underwriting.
AI-based underwriting solutions are great for insurers who want to reduce the time it takes to assess the risks of bringing in new clients. Once again, a lot of the AI and automation in insurance has to do with releasing your employees’ hands and allowing them to focus on the tougher and more complicated tasks instead of wasting time on things that can be done faster and more efficiently through automation. Underwriting is a big part of that, as with automation you can perform risk assessments much faster and your system will be able to note any potential risks and dangers.
5. Use Advanced Tools to Improve Insurance Assessment.
If you need to have greater control over the insurance claims process you might want to try including more advanced tools in your processes. These tools will often target a specific type of claim or part of the claim process. They could, for example, include an image assessment of the photos provided by the client, or an assessment of the environment and conditions during the accident. These will give you much more specialised results, thus, helping you better combat insurance fraud.
Conclusion: Use Technology to Counter Insurance Fraud
When it comes to countering motor insurance fraud, automation and the use of technology can be the best way of ensuring that your insurance company is not losing money. AI-based technologies can also help point out discrepancies and allow for better risk assessment.
To counter insurance fraud you can use Motori, a digital insurance platform that allows insurance companies to find all the necessary services from claim management, to motor recovery claims, to risk scores and pre-risk surveys to combat Insurance Fraud. To learn more about how Motori can help your insurance company combat motor Insurance Fraud, contact us today.
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