How can AI Watch Over Insurance Fraudsters?

By Insurance CIO Outlook | Tuesday, October 01, 2019

 Insurance Fraudsters?Fighting fraud is the same as aiming at a constantly moving target, and AI is helping insurers stay one step ahead of perpetrators.

FREMONT, CA: Insurance plays a pivotal role in the financial plan of an individual, potentially providing financial security when needed the most. It is a necessity against economic damages due to property theft, suffering, and loss. Insurance is one of the few universal products that has reached every corner of personal lives and throughout every economy around the world. But, fraudulent claims have firmly grown to be the single largest expense to insurers, taking up a lot of the insurer's income. The Coalition Against Insurance Fraud revealed that $80 billion fraudulent claims are made across all lines of insurance annually in the U.S. Staged accidents, arsons, exaggeration of a genuine claim, submission of false information on an application and other types of losses are classified as insurance claim fraud that is growing with each passing day. This is where advanced technologies such as Artificial Intelligence (AI) come to the rescue of insurers. According to Accenture, 75 percent of the insurance executives agreed that AI is the key to provide significant industry changes, including fraud detection.

The capabilities of AI in insurance fraud detection are immense. Due to their self-learning techniques, AI systems can adapt to new situations and improve gradually. The technology has found its implementation across various industries. The AI-based system is used to find out the attempts to deceive by submitting fraudulent claims. By processing and analyzing vast amounts of different information, the AI-based system can reveal the connections between multiple factors, detecting fraud with high precision after being trained well enough based on the previously analyzed cases. The program is developed to provide a clear explanation of why it regards a given claim to be false, and then transmit it for further investigation to human experts. AI-based solutions help insurers fight fraud with greater accuracy and within a shorter period. AI senses patterns between multiple claims, revealing unknown correlations that were undetectable earlier by the human eye. By the constant review of existing claims, the program will discover new ways to detect and fight fraud.

Insurance fraud thrusts severe financial and personal costs on clients, businesses, and government. The AI anti-fraud programs provide high hope for enhancing the current situation. The solution doesn't address the challenge directly, and some fraudsters might still find an opportunity to try to cheat on their insurance policies. AI-driven fraud management prophesies the patterns of claims, claims classification, and prior evaluation of claims providing multiple triggers associated with frauds. AI-powered interactive chatbots is another solution that facilitates real-time Q&A via text & voice. These intelligent bots are highly capable, serving as a virtual assistant. NLP-backed chatbots are helping clients resolve their issues & concerns. Bots are instructed in a way to deliver personalized solutions that result in customer pleasure. AI has become essential for insurance companies to develop reliable & effective strategy to fight mounting fraud difficulty proactively.

Initially, insurance firms relied profoundly on their experienced claim adjusters to recognize the potential fraudulent claims. But now, embracing AI technology has helped insurers fight fraudulent claims. However, insurance companies require a collaborative human-machine strategy to fight fraud with just a single tactic or system successfully. To combat fraud, humans necessitate machines, and machines require human intervention. AI implementation has undoubtedly improved the process of identifying and preventing fraud for insurance companies.

Read Also:

Top Artificial Intelligence Companies for Insurance

Weekly Brief

Read Also