The transformations that insurance companies have been going through still have a lot of room for improvement, as there are still pains at various points in the value chain. Some of them are:
- Bad communication with the insured.
- Tedious and lengthy settlement processes.
- Lack of interoperability between all services.
- Claims fraud.
How does this impact the insurance industry?
The consequences are a string of bad experiences for the insured and, as a consequence, put a considerable amount of money at risk. According to an Accenture report, around $170 billion could be lost in insurance premiums alone over the next five years and around $160 billion due to inefficient underwriting processes.
And if we add to this the fraud factor?
"We have to remember that fraud is inherent in the nature of insurance. This is because few companies manage to make the benefits of a policy tangible without the occurrence of a claim, which makes policyholders feel that the value paid for the premium is an expense and not an investment for the prevention of a risk," says Carlos Tejera, Business Architect at LISA Insurtech.
Claims fraud translates into a monetary loss of several thousand dollars each year. If we add to this the flight of customers due to bad experiences, we face a very complex scenario for insurers.
Organizations such as the ACFE (Association of Certified Fraud Examiners) estimate that insurance fraud represents about 10% of total claims received on average for all lines of business.
Stepping up to the challenge
It is known that in many insurance companies' claims systems, due to their very tradition, there is isolated and paper-based data. They are "easy to access," but they are everywhere, scattered and massive.
The challenge consists precisely of grouping all the data in a single place (digitally ideal) to examine them and identify patterns that help us predict frauds, thanks to the use of technology.
Understanding the fraud triangle that points out that there must be a need, an intention, and an opportunity to commit fraud, we only have control over the latter as the others are the fraudster's own.
"The most effective way to manage fraud is with dynamic controls, adjusted with data analysis according to the needs of the process, seeking not only to detect and manage fraud but to attack it even before it is acquired by the company, thus avoiding risk," says Tejera.
Strengthening claims processes against fraud perpetrators is an essential and urgent task for the insurance industry. However, technology is the protagonist and is crucial in driving this mission forward.
Only a few insurers use fraud prevention software, although it is estimated that those companies that do not have such systems only manage to prevent 1.5% of fraud at best.
Fighting insurance fraud with LISA Claims
LISA Insurtech has a solution that uses artificial intelligence and automation of processes and business rules to manage and resolve claims.
The artificial intelligence analyzes both documentary and photographic evidence and is able to identify patterns, previously charged items or those with a higher than average value, frequency and severity, among others. This, in conjunction with a powerful static and dynamic rules engine fully managed by the user, without interaction from LISA Insurtech, provides flexibility in adjusting rules and processes according to requirements.
Insurance companies often manage these complementary processes manually, generating inconvenience and inefficiency. LISA Claims allows this to be done automatically, issuing follow-up communications to ensure compliance with service agreements. Check our services for insurance claims management
These systems enable prevention and detect 5% of all fraudulent claims, generating a significant increase in efficiency thanks to the self-learning nature of the process.