Strategies to Improve Insurance Investigations.

Insurance CIO Outlook | Wednesday, December 28, 2022

Insurance investigations with digital tools limits the possibility of claims fraud and helps investigators identify valid claims.

FREMONT, CA: Studies show that insurance frauds account for U.S.D 40 billion dollars yearly. Insurance fraud negatively impacts insurers and policyholders. Insurance companies use technological tools like machine learning (ML), the internet of things (IoT), and blockchain to detect and prevent insurance fraud.

An effective database of claims processes and policyholder details can limit the scope of insurance fraud. Applications of digital tools optimize insurance investigations.

Policyholder behavioral patterns and advanced analytics: Machine learning (ML) systems detect similar fraudulent incidents. Supervised ML models require insurers to organize and tag each incident as either fraud or non-fraud. Ml algorithms, over time, pick up on parameter values and can categorize fraud cases for insurers to investigate. Unsupervised algorithms are useful for detecting new anomalies. Behavioral analytics processes data from browsing history, clicks, and location. It helps insurers determine the validity of policyholders' claims. Investigators use advanced behavioral analytics to detect fraudulent claims through claims of non-existing or additional damage. Investigatigators use results from analytics to root out false claims. False claims involve adulterated data that include additional policies that are not originally covered by the insurance policy.

Claims processing with chatbots: Chatbots use natural language processing (NLP) algorithms to process claims processing. Chatbots complete procedures quickly and do not provides potential fraudsters time and information to change policy data. Policyholders can submit the first notice of loss (FNOL) without human instance by following chatbot instructions.

Assess the cost of loss with computer vision: Computer vision models gather visual input like images and videos. It asses the cost of the loss by evaluating videos and photos taken to submit an FNOL. Consequently, the insurance company has an idea of the repair cost of the damage.

Notifying claim with the internet of things (IoT): IoT-based software notify insurers of claims. Insurers can respond instantly in the event of accidents or losses. The claims processing begins immediately without the policy users approaching the insurance company. Insurers apply IoT applications to access FNOL-related information from smart devices about the incident's time, location, and other details. This gives fraudsters little time to distort data.

Prevent double dipping fraud with blockchain: Investigators access incidence and policyholder details from blockchain data reserves to ensure that fraudsters are not submitting their claims with multiple companies.

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