Insurance Sector
Navigating Complex Challenges with Innovative Solutions
Globally speaking insurance fraud is the second most practiced fraud, right behind tax fraud. The field of insurance is wide and fraud exists in every area. Claims are by far the biggest expense for insurance companies. Huge resources, accessible for paying out loss claims, are attractive for fraudsters. Insurance companies are therefore pressured to protect those resources by managing and optimizing the claim process and therefore minimizing the risk of fraud, to assure long-term sustainability. Fraud detection tools must comprehend the whole investigation process, including understanding and detection of potential red flags – KFIs (Key Fraud Indicators) and KRIs (Key Risk Indicators), which is RAALS’s huge competitive advantage. RAALS as predictive insurance claims processing, or claims analytics tool, helps insurers make the right decision, at the right time, helping them to differentiate themselves from competitors, achieve measurable ROI and enjoy intangible benefits like better customer satisfaction.
Unfortunately, the larger the scale of the industry, the more likely it is to become the main target of criminal activity. The Coalition Against Insurance Fraud (CAIF) estimates that fraud costs in the insurance sector are as high as $ 80 billion a year.
PROBLEM
Insurance fraud, combining detected and undetected cases, is estimated to represent up to 10 percent of all claim expenditure for insurance companies. According to The Coalition Against Insurance Fraud, global insurance fraud costs roughly 80 billion euros annually. Furthermore, a CAGR (Compound Annual Growth Rate) of 17,4% is expected during the forecast period (2021-2026). This statistic is concerning not only for insurance companies individually but for the entire society. Fraud is a fund of criminal activity, causing the rise of premiums for honest customers and creating skepticism towards the institution. As the number of frauds and similar incidents is rising at an alarming speed, it becomes inevitable for companies to have proper measures to fight back. 85% of insurance companies already incorporate fraud investigation teams. These teams are facing an enormous amount of structured and unstructured data. They need to be analyzed and monitored in the right way, in order to gain insights and detect potential fraud.
SOLUTION
RAALS is the most advanced fraud prevention platform for the insurance sector available today. Developing and implementing user-friendly claim procedures is the most important consideration because data management security is essential in avoiding fraudulent claims. RAALS is a prevention and investigation tool that is already saving millions in the world’s leading financial institutions where it has been implemented. Working with big data and forward-looking models like RAALS, insurers can perform statistical and rapid analysis to better understand the key drivers of risks in insurance claims. It delivers the step-change required in the accuracy, efficiency, and speed with which fraud is predicted, detected, and investigated. Simultaneously it enhances the satisfaction levels of policy-holders and brokers by expanding valid transactions and eliminating potential disputes during the policy lifecycle. Generally speaking, fraud leakage reduces profits by 10 - 12%. With RAALS’ breakthrough technology more than half of this loss can be prevented. The corresponding improvement in the loss ratio is over 6%. This transforms the fraud management department into a key driver of profits in a highly competitive market sector.
