The volume of insurance claims increases dramatically during December and January for a number of reasons. Increased holiday traffic and more social events \u2013 and therefore more people driving under the influence \u2013 could potentially mean more accidents. Also, as families head to the coast, homes sit empty for weeks and are easy targets for burglars. And all this happens at a time of year when we experience extreme weather patterns, resulting in more claims for hail and flood damage. By the time the new year rolls around, people are generally under financial pressure from having spent too much over the festive season and worry about how they\u2019re going to pay January\u2019s bills. While they might have a legitimate loss event, these unique circumstances could motivate policyholders to submit false claims or to inflate their claims \u2013 for example, while claiming for a pair of sunglasses and a cellphone that was stolen out a car, the policyholder throws in an iPad and camera, even those these were never in the car.<\/p>\n
Too many claims; too little resources<\/strong><\/p>\n Insurance companies have a limited number of claims investigators, making it impossible to scrutinise every claim for fraud. As a solution, they may apply a claim threshold, say of R20,000. Any claim under this amount will not be reviewed and will be immediately processed for payment. This means thousands of fraudulent claims could be slipping through the cracks, amounting to huge losses.<\/p>\n Separating the wheat from the chaff<\/strong><\/p>\n With advanced analytics, insurers have the ability to scrutinise every single claim. By applying robust fraud rules and models, claims with a high fraud propensity are automatically flagged. Claims considered low risk will be immediately processed for payment while high-risk claims will be sent to the fraud department for further investigation, allowing insurers to better allocate their investigative resources. To achieve this, analytics systems need to be fast and flexible and provide the ability to create new fraud rules in response to trends and unique circumstances.<\/p>\n For example, new policy applications received in June might not be subject to the same level of scrutiny as those received in the first weeks of January, especially if the policyholder submits a claim shortly after his application was approved. This could suggest that the loss event happened before he had cover in place, or that his claim was rejected by another insurer and he\u2019s now taking a chance with a different provider \u2013 what we call cross-carrier fraud.<\/p>\n Balancing act<\/strong><\/p>\n In the past, it would take weeks to settle an insurance claim, with the onus often on the policyholder to show why the claim should be paid. But competition in the short-term insurance market has forced providers to settle claims quickly to retain customers. Insurers need to strike a balance between managing the customer experience by processing legitimate claims as soon as possible and limiting fraud. Having the ability to segment claims using analytics allows insurers to quickly separate the genuine claims from the suspicious ones. Insurers that use analytics on an ad hoc basis are being curtailed in their ability to respond quickly and could lose customers \u2013 and more money to fraud \u2013 as a result. It is estimated that fraud costs the short-term insurance industry anything between R6 billion and R8 billion annually. Having the ability to weed out fraud means insurers won\u2019t have to compensate for losses by hiking premiums, resulting in happier, more loyal customers.<\/p>\n About SAS:<\/strong> SAS is the leader in analytics. Through innovative analytics, business intelligence and data management software and services, SAS helps customers at more than 75,000 sites make better decisions faster. Since 1976, SAS has been giving customers around the world THE POWER TO KNOW\u00ae. SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. \u00ae indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright \u00a9 2014 SAS Institute Inc. All rights reserved.<\/p>\n Author<\/strong>: Karabo Sera CLICK HERE to submit your press release to MyPR.co.za.<\/p>\n Have a look at the online visibility from 12\/18\/2015 to today for \u2018Tis the season for insurance fraud<\/strong>:<\/strong><\/p>\n \n Read more on:<\/strong> MyPR<\/a> Submit your own Press Release<\/a> or get free content for your publication.<\/p>\n My Press Release (MyPR) provides free South African targeted content and press releases for on and off line publishers and media. Registering on MyPR enables public relations companies and practitioners to post articles under their own author name. Public Relations Companies and practitioners, event organisers, sports and political writers use MyPR as a distribution mechanism for their press releases, content, images and news. A forever free subscription allows publishers and media free access to all press releases, content and images on MyPR. By William Lawrence, Regional Practice Lead: Fraud and Financial Crimes at SAS Mike overindulged at the year-end office function this weekend. While driving home after a few too many beers, he veers off the road and crashes his BMW into a tree. His car is in bad shape but Mike knows that if he reports […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9021],"tags":[10023,76,2995,3193],"class_list":{"0":"post-60180","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-mypr","7":"tag-tis","8":"tag-fraud","9":"tag-insurance","10":"tag-season","11":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/60180","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=60180"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/60180\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=60180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=60180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=60180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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