"From an insurance perspective, the ramifications of financial dire straits are linked to fraud, particularly opportunistic fraud or application fraud.
Economically, a coronavirus-caused recession has been rumbling along in the background since last year, tipping its hat to furloughed or redundant staff and shaking hands with shut down firms.
Robin Challand, claims director at Ageas UK, told me at the end of last year that insurers have to be mindful of recessions such as this one because “recession tends to lead to changes in customer behaviour [and] fraud”.
“Fraud is something that is a broader challenge, but we need to be mindful of any changing patterns that we start to see off the back of any downturn in the economy,” he continued."
Katie cott Insurance Times 8th Jan 2020
Opportunistic fraud is just one side of the coin as far as insurers are concerned. Just as AI, NLP, machine learning et al are hailed as potential solutions to counter fraud professional fraudsters are equally able to exploit these technologies to hunt for and exploit vulnerabilities in an insurers systems. And let's be honest there are plenty of vulnerable places resulting from the patchwork of systems and technology stacks an insurer or broker has deployed.
Legacy core systems, modern core systems, point solutions to tackle specific issues and snazzy new solutions from innovative insuretchs. Not to mention the disparate data and system silos inherited over decades of M&A activity.
The best answer is to use combinations of technology and the unique knowledge and intuition gained by counter fraud professionals over years looking into the minds and behaviours of professional and opportunistic fraudsters.
They are the Sherlock Holmes of the insurance world able to join apparently disconnected events, mobile phone numbers, addresses, companies, addresses. But they still need technology to keep ahead of those able to defraud insurers. Not for nothing have customers like police forces and HMRC used investigative software like 360Retrieve to combine their expertise, rules engines and algorithms into a winning combination to combat fraud.
This is integrated with the digital claims platform 360SiteView for a complete solution deployed by household name insurers.
Any counter fraud solution is only as good as the data accessed, analysed and presented in actionable reports, dashboards and automated processes. It is worrying that an insurer typically is only able to access 20% of its own data! Why----
It is locked away as unstructured data in emails, web form free text, metadata, images and even hard copy letters and reports. Insurers need a way of transforming that unstructured text into searchable data that is combined with algorithms and rules engines. That is what 360Retrieve delivers.
Of course, once you surface that 80% of previously hidden data there is far more to so. Not least combine this unstructured data with the many external databases so vital to get a full picture of the world of fraud.
Synectics Solutions is an expert in this field. Combining its 120 banking, insurance and other customers data offers unrivalled means to build a complete picture of current threats and predict futures ones. as Synectics says:
"Broadening understanding by bringing organisations together to share data and intelligence has been the lifeblood of Synectics business for many years.
Our experience in creating collaborative structured and unstructured data solutions from both public and private sector information is unrivalled, It's this pioneering spirit that has helped to protect and enhance our clients' ability to succeed in markets all around the world."
Better still insurers can combine Synectics solutions and 360Retrieve for an unrivalled counter fraud solution. Surfacing and joining all those hidden insights in unstructured data with the extensive wealth of data sources accessed and analysed by Synectics combined with AI, data scientists for the highest KPIs and returns on investments. Not for nothing have they saved £/$/€ billions for customers.
There are times when deeper investigations are needed. To validate hunches, alerts and predicted trends. The expertise of investigation companies like Robertson & Company are unrivalled. Better still they leverage the technologies and data analysis discussed above with its own team expertise to delve into those dark areas on behalf of insurers, brokers and reinsurers.
A three pronged attack on the existing and growing threats from both professional and opportunistic fraudsters.
Further Reading: Quarterly Financial Crime Report from Synectics
To find out more about any of these issues drop me a line to Mike.Daly@360Globalnet.com
Granted, fraud is a complex beast and looking at recession-driven fraud is only one facet. However, as we continue to share the ‘be kind’ mantra, it all seems inexplicably linked - tackling fraud resulting from financial hardship will no doubt be on insurers’ agendas this year.