By Robert Harris, World Product Supervisor for Insurance coverage Fraud at BAE
For an business the place knowledge is king, it’s maybe shocking that insurance coverage wasn’t at all times the primary to embrace new expertise. If that was as soon as the case, nonetheless, it’s definitely making up for misplaced time as digital innovation transforms enterprise processes, creates new income streams and provides worth for brand new prospects. But at instances of financial recession and hardship, fraudulent exercise typically spikes on-line. Insurance coverage is not any completely different — however right here, it’s typically erstwhile respectable prospects that have interaction in determined behaviours.
This poses an issue for insurers: spot the actual from the fraudulent claims, with out impacting the shopper expertise. Happily, expertise is right here to assist.
The world turns digital
In Europe, the average person is said to interact with a tool at the least 30 instances a day and smartphones as much as 200 instances. Youthful expertise customers would possibly exceed these figures earlier than they’ve even completed breakfast. This can be a problem and a possibility for insurers. These prospects are extra demanding than earlier than: they’re asking for a similar seamless experiences they get through on-line shopper channels. However for these capable of match these rising expectations, there’s the potential to create new income streams and merchandise, differentiate competitively, and win hearts and minds.
AI algorithms could be designed to analyse the huge troves of buyer knowledge collected by insurers to create extra personalised insurance policies and fairer pricing. Cellular apps could be designed assist to enhance the shopper expertise. IoT sensors on vehicles might be used to help utilization primarily based or demand-adjusted pricing, and even to alert the proprietor when a fault is creating, probably saving the insurer on automotive restore prices. And far more apart from.
A recent non-life survey by PwC throughout 16 nations discovered that two-thirds of customers can be prepared to have a sensor connected to their automotive or house, offered that the tip result’s a discount in premium. This quantity will increase to 76% for 25-34 year-olds.
Fraud steps in
But new digital channels may present new alternatives for fraud. On the one hand, the variety of claims could also be anticipated to fall throughout a pandemic like COVID-19. In spite of everything, persons are making fewer journeys within the automotive, international journey is just about non-existent and most staff are furloughed or working from house. This would possibly assist save insurers cash. However on the flipside, historical past tells us that in recessions, we will additionally anticipate a rise in dishonest behaviour.
Within the motor insurance coverage area this might take the type of an elevated variety of suspicious thefts and fires,
particularly in households with greater than two autos, or whiplash and different claims that may’t be verified face-to-face. Within the house, anticipate a rise in home and storage fires, together with costly tools, that are put out with out the fireplace companies being referred to as. Or a sudden enhance within the contents worth, or mysterious disappearance of sure gadgets like jewelry.
Insurance coverage fraud through the pandemic might even stretch to false claims for telemedicine work that didn’t happen, or accidents prompted when working from house. There can also be makes an attempt by skilled fraudsters to file compensation claims in opposition to corporations about to go bankrupt. This makes it harder for the insurer to research or get the knowledge they should discover out what actually occurred.
How tech can assist
Happily, whereas fraudsters are making the most of digital channels, related applied sciences may assist insurers to reply in sort. For instance, interviews with the claimant are nonetheless an necessary a part of the claims validation course of in lots of instances. In a world below lockdown, insurers may use new instruments similar to voice analytics to conduct such interviews over the telephone. The added benefit of those is that they are often programmed to each determine who the speaker is and whether or not their vocal behaviour sounds suspicious.
Amongst Particular Investigative Models (SIU) new patterns of working are additionally rising to take account of the truth that at-scene investigations, medical and residential examinations and interviews could also be troublesome to facilitate. Happily, digital proof is stepping as much as fill the outlet left by conventional offline strategies to work out if a declare is legitimate or not. Digital expertise that may determine photographs and invoices, the place they have been taken and if they’ve been tampered with can’t solely assist to root out fraud but in addition course of investigations quicker and extra cost-effectively. Geospatial mapping and satellite tv for pc imagery may assist, by offering investigators with a transparent view of an accident or incident location.
Even the courts system goes digital to clear the backlog of insurance coverage fraud and different instances mounting up through the lockdown.
In a digital world, there’s arguably extra alternative for would-be scammers to sport the system. The financial hardship caused by the pandemic may subsequently be a testing time for a lot of insurers. On this local weather, these already invested in digital transformation will stand a greater likelihood of recognizing scams early on — weathering the storm and minimising the affect of a COVID-19 fraud spike. Know-how is right here to assist, through the pandemic, and past.