Insurance claim fraud is the act of individuals or businesses incorrectly exploiting their insurance policies for their own gain. This is more common than you might think, across all insurance specialisms, whether it be auto or travel, to name a few. Due to these issues, there is now specialized AI technology in place that is constantly developing to try to minimize fraudulent activity. Wondering in what ways fraud detection ai helps to prevent insurance claim fraud? Read on to find out!
What is considered insurance fraud?
Insurance claim fraud covers any false claims that are put into insurance companies. As mentioned, this could be by one consumer or even insurance agents. This includes untrue claims and even exaggerating a claim. For example, if someone makes out that a medical condition is worse than it actually is to get more of a monetary gain from their insurance company. Another form of insurance claim fraud is somebody putting more than one claim in for the same thing. Basically, there is no room for deception when it comes to putting in a claim. The information has to be accurate or it is in breach.
In what ways can Artificial Intelligence help to stop this kind of fraud?
AI works to stop fraudulent insurance claims by picking up on questionable activity. This could be by gathering customer behavior pattern data, as well as analyzing the data they input. AI can then alert people working at the insurance firm to further investigate the claim. Before the assistance of AI, great deals of time and money would be wasted by individuals looking at each claim without the computer technology to pick up on certain information immediately.
The fact that AI can work around the clock without stopping means that the minute that an insurance claim is entered, the process can automatically begin. This means algorithms can instantly recognize and notify insurers about potential fraudulent claims if something is flagged. This is hugely beneficial to insurance businesses as if the false claim is caught earlier on, it can save them a lot of time further down the line, and should decrease the likelihood of them having to wrongly pay out any of the money.
If something isn’t adding up with the claim, there is probably something wrong. That is what AI can pick up on – it is designed to understand historical data and how history can repeat itself. So, for example, it can read previous textual customer service communications with specific policyholders, or it can pick up if the person in question has put claims in previously. This technology is getting smarter all the time, meaning the chance of fraud is much less likely, as if there are suspicious claims, these are quickly sent to fraud teams to examine further.
Artificial intelligence has been a great welcome to insurance companies around the world, as it has greatly helped to spot and stop false claims from going through. Whilst it may not be 100% foolproof just yet, it has taken out a great deal of the admin and has proved to be incredibly useful.
You may be interested in: How to Help Prevent eCommerce Fraud