A Swiss Army knife is often praised for its ingenious design. Small enough to fit in a pocket, yet helpful in many different situations, it became a synonym for products that within one umbrella offer solutions to many problems. This is exactly the idea of end-to-end fraud prevention systems, to resolve multiple problems you are facing throughout the full policy lifecycle. Here are five things you can improve with end-to-end fraud detection software:
A study by Deloitte shows that the biggest challenges to be faced in compliance are:
- Management buy-in for this obligation
- Coordinating company-wide compliance
- Conducting discreet screenings
- Inefficient use of technology
To comply with legal obligations, make a proper risk assessment, and take fraud-preventing measures, various challenges can be overcome in a cost and time-efficient manner. The idea: the more you can perform standardized risk assessments with explainable results, the smoother your operations are. With automation, human errors minimize which has a direct effect on your bottom line. Moreover, accepting and paying out on the right risks has a direct positive effect on the loss ratio. On top of that, your employees are free to solve complex problems that drive your business forward and leave repetitive work to automation systems.
Improve customer satisfaction
“Impatience is a virtue,” Forbes Magazine asserts. “As more devices and apps deliver instant gratification, the more it sets a new standard for customer expectations.” It’s no surprise in today’s digital age that customers want what they want – and they want it now. Instant policy acceptance is a great way to attract customers, but the age-old concern of letting the right ones in isn’t going away, at least not if a carrier wants to remain profitable.
Trusting your customer is a key step to getting the right customers in and keeping them happy. So how can you achieve the right level of trust? For insurance carriers, it’s all about changing your mindset. The vast majority of customers are legitimate – they’re not out to get you, and they’ll only claim a loss when it actually happens. So why not treat them like the good people they are? Think of it like an express lane – once you’ve been vetted, you’ve earned the right to straight-through processing. While suspicious customers might be subject to delay, trusted customers will feel a sense of reward when policy applications are accepted, and claims are paid right away. When customers feel rewarded, they will remain loyal and become brand ambassadors.
Better use of data
Utilizing the power of data analytics, in commercial or personal underwriting processes can be innovated with actionable insights into every single risk. When you leverage the power of both internal and external data sources, your commercial underwriters can evaluate a comprehensive risk analysis dossier of a company and automate decisions based on customizable risk appetite rules. True NAICS classifications are hard to find, yet important – how are you to know if that restaurant you’re about to accept into your book of business has a DJ booth setup and a dancefloor…Changing the risk completely. If you let a solution focus on the chore, you can focus on the core: providing brilliant service to your customers.
When talking to senior counter-fraud professionals, we often hear that 20% of their staff detects 80% of all claims fraud; and the interesting part is that generally there’s no discernible difference between the portfolios of the employees. Some adjusters, either through training or instinct, simply seem to have a better nose for potential fraud. Creating consistency here is key. However, how can you standardize what 20% detects and the rest is missing?
Given the speed of the evolution of fraudsters, carriers need to be able to use technologies to make a real-time decision on a claim. Often though, the detection is based solely on a batch process, typically on a daily or weekly basis, against either an AI model or the network analytics. As customer demands for straight-through processing continue to increase, insurers are forced to deliver on that technology. Without such, flaws in the traditional process can be easily exploited by today’s savvy fraudsters. For these reasons, having an AI system that acts in real-time can make decision-making much quicker.
Accelerate fraud investigations
Structured and confidential fact-building for all flagged claims can sometimes be troublesome. So how to save time and automatically decide the best next steps in fraud investigations while at the same time complying with all rules and regulations around?
Investigators should be able to quickly and easily add case notes, perform reverse image analysis, redact reports, and research persons, objects, and businesses – which easily can reduce cycle times by up to 50%. Even more, investigations can require advanced analytics, business intelligence, and 3rd-party vendor management. As the workforce changes, the new generation of investigators demands different tooling than most current ones do. And as a carrier, you should be able to support that.
The future of fraud detection lies in the use of advanced technologies to support real-time, large-volume, and highly precise modeling that goes beyond claims fraud. A hybrid approach of human expertise and computer-assisted models will be essential in preventing losses. End-to-end solutions truly give you all the tools you need to protect yourself and your honest insureds. Full policy lifecycle fraud systems prevent fraudsters from doing business with you, detect risky applications and risky claims, and make your investigations teams more efficient.
If you’re looking for a real-life example of the benefits an automated end-to-end solution can bring to you, read the story of our partner InShared to learn how FRISS positively impacted their bottom line and day-to-day operations.