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Ever since Artificial Intelligence (AI) has been widely adopted, it has facilitated the creation and management of better and more streamlined processes across organizations. AI has the innate capability to provide insightful and high quality customer experiences thereby making a company’s operations much more structured and systematic. These benefits of AI are applicable to the insurance industry, as well where critical processes such as insurance claim settlements, personalization of user interfaces, and fraud detection can be vastly improved in terms of speed, accuracy and relevance thanks to the evolution of AI. As far as insurance claims are concerned, one of the foremost concerns of insurers is in effectively and efficiently detecting and preventing fraudulent claims from being paid out. The prevention of fraudulent claims can significantly improve the performance of an insurance company as it benefits not only its bottom line but it can also help in lowering premium rates for its customers. This is where AI can come in and make a difference. AI technologies have considerably reformed information systems by making them simpler and easier for humans to use.
With the advent of AI, the insurance industry has revamped the claims management process by making it not just quicker and easier to use, but has been able to achieve the same with far fewer errors. As a result of this, insurers today can achieve an efficient and effective claims management system.
From smart chatbots that offer an always-available customer service to the range of machine learning technologies that bolster processes through automation, AI is already being used in many ways. With increased awareness and resources about the game-changing influence of AI in the insurance industry, the initial hesitation and discomfort around its implementation are now minimal as there is more emerging evidence of the benefits that AI can deliver. AI-enabled technology not only automates the scheduling of executive-level tasks but also enriches service quality by helping agents make right decisions and irrefutable judgments. One of the very significant changes that AI is making in the insurance industry is in fraud detection. Here is a look at some ways in which AI is making a difference in fraudulent claim detection and prevention:
Big fraud schemes
Crash for cash is a well known but often hard to detect type of insurance claim fraud. To detect insurance fraud, a vast amount of time, effort, and money needs to be invested. With the deployment of AI, internal and external databases contain data points that can be thoroughly cross-referenced and analyzed. This is a great way to simplify insurance fraud detection.
In a crash for cash scheme a few years back, cheap cars were used to ram into luxury ones like Jaguars and BMWs. False accident management companies were ‘hired’ to charge for non-existent towing fees and storage that didn’t happen. With an AI enabled fraud detection system installed, it would cross-reference human and inhuman components used in each insurance case using databases. This means a minute examination of all of the individual’s and companies’ fraud records, credit databases, and news sites, all in a matter of seconds. The results of this search would throw up anomalies that would be easy to track and expose.
In the line of personal insurance, usually, very ordinary and hard-to-detect fraud approaches are used. For example, a sudden increase in broken or stolen TV claims that crop up along with the launch of next-generation flat-screen TVs. Often, these new product launches occur before substantial sporting events such as the Olympic Games, the Soccer World Cup, etc. Using AI, fraud detection would become much more convenient. If, for example, a person claims that their iPhone was stolen, a search-run through databases can be conducted to look for any previous suspicious activity. If any is detected, a red flag can be raised so that an expert can dedicate more time to this claim.
Top Insurance companies using AI Based Systems for fraud detection
With a workforce of 50 people, Anadolu Sigorta is the first and one of the biggest insurance companies in Turkey. To increase efficiency, they bought a tool that could conduct predictive analysis. The tool is reported to have increased the company’s ROI to 210% within a year of its usage, as reported by this customer success story. Following the implementation of the software, a considerable number of claims could be processed in real-time. The software provider claims that the insurer could have lost $5.7 million if the fraud had not been detected and prevented in time.
One of France’s top notch insurance firms, AXA, also adopted Al fraud detection software. AXA’s basic concern was to handle the vast and sophisticated infrastructure which was acquired from various levels of different companies. They wanted to develop a sure-shot solution that was capable of handling the problems and circumstances and analyzing the results depending on the company’s branch that they were dealing with. The software that they installed can detect distinct patterns based on computer behavior and employee network. This enables the system to respond and take immediate actions against threats.
With the help of a proper AI solution in place, frauds can be detected before losses worth millions are incurred. Neutrinos has helped insurers around the world build AI systems to help them reach their performance goals quickly and easily with solutions that are less expensive than you might think. The bespoke solutions that the experienced technical team at Neutrinos builds for its clients always deliver on their promises. Reach out to us to set up a meeting today!