One SIU at a Time
Special investigative units are increasing the use of
analytic technologies to identify suspicious claims.
By Bob Violino
Insurers are always on the lookout for ways to spot fraud, and with good reason. The in- stances of fraud, and the variety of fraudu- lent activities, continue to rise. According to the National Insurance Crime Bureau’s (NICB) ForeCAST Report, the number of questionable claims increased to 48,887 in the first half of 2011 from 46,766 in
the first half of 2010 and 41,309 in the first half of 2009.
That represents an increase of 18.3% over the two-year
To help snuff out fraud, insurance claims departments and their special investigative units (SIU) are increasingly leveraging analytic technologies to enable
them to more quickly, easily and effectively identify potential cases of fraud.
“Modern claims solutions often include scoring
mechanisms. Combined with workflow and task generation, insurers can use business rules with scoring
mechanisms to identify ‘red flags’ and automatically
refer claims to special investigative units,” says Karlyn
Carnahan, principal at consulting firm Novarica. “This
provides a convenient way for patterns to be identified
and files to be referred,” she says.
Firms can look at data across business units to identify potential fraud, and examine both claims and underwriting data across lines of business to highlight suspicious claims, adds Carnahan. For example, they could
identify a business interruption claim reporting wage
loss for more employees than stated in the workers’
compensation underwriting file.
“While some of this is done manually, increasingly
technology is being used to identify links using sophisti-
cated analysis tools,” Carnahan says.