4 Critical Tactics in the Fight Against Fraudsters
Forrester presents four best practices meant to help insurers protect themselves by using what has become fraudsters’ biggest asset—data.
Insurance Networking News, December 12, 2012
Insurers are caught in a bind when it comes to business growth and preventing insurance fraud, according to a new report from Forrester, titled “Prevent Insurance Crime With The Four Cornerstones Of Better Fraud Management”; growth nowadays—which means emerging technologies such as mobile and social—inherently presents challenges and open doors to fraud risk.
The four cornerstones suggested by Forrester are 1) rethink SIU teams, 2) establish standard metrics, 3) use mobile applications everywhere, and 4) improve data quality and increase data quantity.
That last one rings particularly true, as both insurers and fraudsters are attempting to use the same asset against each other: data. As of late, insurers are found losing that battle.
Forrester cites information from the National Insurance Crime Bureau stating that questionable claims identified jumped up 9.4 percent from 2010 to 2011, and “2012 is on track for even higher levels, with the rate of these suspicious claims up 20 percent over the same period a year earlier.”
According to the report, part of this surge is non-personal and non-paper-based interactions. The report points out that “the age of the consumer” exposes insurers as the top growth initiatives are bringing insurers into these uncharted, virtual waters—unfamiliar to the business enterprise, but familiar to fraudsters already inhabiting mobile and social spaces.
Forrester notes a lack in urgency as insurers see SIU organization as a cost that is currently being outweighed by satisfying consumers and a focus on the ease of doing business.
Therefore, the report concludes, incorporating fraud data into general business intelligence portfolios should become a priority. While fraudsters become more sophisticated and resourceful, so too should SIU teams. Forrester claims that fraud tool kits need to demand predictive analytics and business intelligence strategies that enable an early warning system and advanced detection/deflection.
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Insurance Fraud - The Holiday Issue
Continuing with the twenty fourth issue of the 16th Year of publication of Zalma's Insurance Fraud Letter (ZIFL) Barry Zalma reports in the December 15, 2012 reprints the annual Christmas Fable of Fraud, as it has every year; a report on the difficulty of getting a convicted fraud perpetrator in jail; a report on how much insurance fraud actually takes from the insurance buying public; and a report on the closing of courts for lack of funds.
ZIFL also reports on four new E-books from Barry Zalma, Zalma on Diminution of Value Damages - 2013; Zalma on California SIU Regulations; Zalma on California Claims Regulations -2013 and Zalma On Rescission in California -2013. For details on the new e-books and a list of all e-books by Barry Zalma go to http://www.zalma.com/zalmabooks.htm.
The issue closes, as always, with reports on convictions for insurance fraud across the country making clear the disparity of sentences imposed on those caught defrauding insurers and the public with sentences from probation to several years in jail.
The last 10 of posts to the daily blog, Zalma on Insurance, are available at http://zalma.com/blog follow:
Zalma on Insurance
■ No Coverage for Loss From Use of a Firearm
■ "Arising Out Of" Means What it Says
■ Desire Doesn't Change Policy Wording
■ No Damages - No Coverage
■ INSURERS SUE FRAUD PERPETRATORS
■ Lack Of Waiver of Subrogation is Expensive
■ Life Insurer Must Pay If No Evidence of Murder by Beneficiary
■ Claims File Protected Work Product
■ Damages
■ The Importance of the Waiver of Subrogation
ZIFL is published 24 times a year by ClaimSchool. It is provided free to clients and friends of the Law Offices of Barry Zalma, Inc., clients of Zalma Insurance Consultants and anyone who subscribes at http://zalma.com/phplist/. The Adobe and text version is available FREE on line at http://www.zalma.com/ZIFL-CURRENT.htm.
Mr. Zalma publishes books on insurance topics and insurance law at http://www.zalma.com/zalmabooks.htm where you can purchase e-books written and published by Mr. Zalma and ClaimSchool, Inc. Mr. Zalma also blogs "Zalma on Insurance" at http://zalma.com/blog.
Mr. Zalma is an internationally recognized insurance coverage and insurance claims handling expert witness or consultant. He is available to provide advice, counsel, consultation, expert testimony, mediation, and arbitration concerning issues of insurance coverage, insurance fraud, first and third party insurance coverage issues, insurance claims handling and bad faith.
ZIFL will be posted for a full month in pdf and full color FREE at http://www.zalma.com/ZIFL-CURRENT.htm .
If you need additional information contact Barry Zalma at 310-390-4455 or write to him at zalma@zalma.com.
Posted by: BARRY Z | December 15, 2012 10:56 AM
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