Anti-fraud analysis explodes as cyber warfare rages
In a new category of the 2021 survey, the study also highlights the importance of identity verification software, cited by 40% of survey respondents. Identity analytics is fast becoming a go-to technology for insurers amid an alarming spike in malicious phishing scams, on the rise 600% since the start of the pandemic.
“The changes we’ve seen since the 2018 study emphasize the increasingly sophisticated technologies needed to thwart the criminal exploits of insurance fraudsters,” said David Hartley, director of insurance solutions at SAS. “Predictive modeling grew 25%. Text mining nearly doubled from 33% to 65% in three years. These results prove that while COVID has fueled rampant fraud, insurers are nimblely expanding their advanced analytics and AI capabilities to counter rapidly evolving threats.”
The results of the study will be explored in a future Insurance Fraud Webinar hosted by the Coalition and SAS, The State of Insurance Fraud Technology 2022: Trends as the World Reopens, February 16 at 2 p.m. ET and then available on request.
Assess technology trends in insurance fraud since 2012
Insurance fraud causes more than $80 billion in losses annually in United States alone. Fraudsters around the world are using phishing schemes, malware, and even social media quizzes to steal sensitive personal information from unsuspecting consumers. The lucrative data is then sold on the dark web for nefarious purposes, such as traditional identity theft or the creation of synthetic IDs using an amalgam of stolen and fabricated data. Scammers can use the identities to file fake cash claims or collect commissions from insurers for selling fake policies.
Since 2012, the Coalition has used its biennial State of Technology in Insurance Fraud study to track how technology increases the abilities of fraud fighters to thwart fraudsters and criminal networks. SAS has been a partner in the research effort since the inaugural study.
Now in its fifth iteration since 2012, the latest study is based on responses to a 20-question survey sent to 100 Coalition members in October 2021. Survey recipients are employed by insurance companies that accounted for at least 80% of estimated property and casualty insurance premiums written in the U.S. insurance market in 2020.
“Capturing these trends over time allows us to understand how and to what extent insurance companies are using anti-fraud technology,” said David Rioux, co-chair of the Coalition and chair of the organization’s research committee. “This research also provides important insights into emerging use cases and common challenges, helping the entire industry discern which technologies are proving most effective against these unprecedented fraudulent attacks.”
Additional takeaways from the latest study include:
- Anti-fraud technology is booming. The study identified automated red flags (88%), predictive modeling (80%), text mining (65%), reporting capability (64%), case management ( 61%), exception notification (51%) and data visualization/link analysis (51%) among the most used anti-fraud technologies by insurers.
- Insurers are diversifying their data sources. In addition to relying on their own internal data, insurers are turning to industry fraud watch lists (88%), public records (79%), third-party data aggregators (55%), social media (48%) and data from personal devices (15%). Notably, the use of unstructured data has grown from just under half in 2018 to 81% in 2021.
- An image is worth a thousand data points. Insurers are turning to photo analytics technology (increasing from 49% in 2018 to 81% in 2021) to authenticate claims damage, identify digitally altered images, and index images submitted in other claims.
- Investigators are calling for more resources. New anti-fraud technology is improving the efficiency of investigation processes, but the resources insurers devote to internal and external investigation teams are insufficient to keep pace with the billions of frauds committed each year. Limited IT resources were the top anti-fraud challenge, cited by 68% of respondents.
“We know that criminals are using advanced technology on a large scale to steal personal information and plunder billions of dollars from insurance companies each year,” said Kim Kuster, Senior Business Consultant in SAS’s Global Security Intelligence practice. “Wider adoption of emerging technologies and greater investment in fraud-fighting capabilities, using humans and machines, will help reverse the trend of fraud that is flooding domestic and international markets. insurance.”
the State of Technology in Insurance Fraud The Coalition’s study and similar research efforts aim to prepare fraud investigators and their management teams for the threats ahead. Learn more about InsuranceFraud.org.
About the Coalition Against Insurance Fraud
Formed in 1993, the Coalition Against Insurance Fraud is America’s only anti-fraud alliance speaking on behalf of consumers, insurance companies, government agencies and others. Through its unique work, the Coalition is empowering consumers to fight back, helping fraud fighters better detect this crime, and deterring more people from committing fraud.
SAS is the leader in analytics. Through innovative software and services, SAS empowers and inspires customers around the world to turn data into intelligence. SAS gives you THE POWER TO KNOW®.
SAS and all other SAS Institute Inc. product or service names are either registered trademarks or trademarks of SAS Institute Inc. in the United States and other countries. ® indicates United States registration. Other brand and product names are trademarks of their respective companies. Copyright © 2022 SAS Institute Inc. All rights reserved.