Fighting insurance fraud with analytics: IASIU 2011

As a member of the insurance fraud-fighting community, I have had the pleasure of attending the International Association of Special Investigation Units (IASIU) annual conference many times.  September 2011 in San Antonio was different.  For the first time ever, IASIU hosted an examination for individuals seeking a new designation: the Certified Insurance Fraud Analyst (CIFA).  For years, the Certified Insurance Fraud Investigator (CIFI) designation has been recognized as a key qualification for serious and experienced fraud fighters in the property and casualty insurance business.  But as insurers add more analysts to their investigation units, IASIU has had to make room for the change.

In fact, a large part of this year's conference agenda contained analytical subject matter.  I was invited to present a session on Proactive Techniques to Advance Insurance Fraud Detection. My session was a little different from the standard show-and-tell workshop. I focused more on how SIU business process needs to change in order to keep up with the ever-changing landscape of fraud.  As data volumes and fraud risk simultaneously grow at alarming rates, insurers have no choice but to embrace technology to help them scale and address these issues. 

Several sessions at the conference focused on the use of various types of technology used to build robust link analysis charts and other data summarizations.  But it strikes me that today’s analysts spend far too much of their valuable time searching for and collecting data and not enough time doing what they were actually hired to do. Framework-based technology solutions like the SAS Fraud Framework for Insurance can help streamline these procedures by aggregating the relevant information first, allowing the analyst to focus his or her time on conducting the analysis and communicating results to others.  These are the things that add value to the organization. 

I predict that nearly all insurers will be researching or implementing this type of technology in the next 24 months. Some companies have already embraced the idea of proactively integrating their data and prioritizing the workload for their staff; giving their SIU a head start on high-priority investigations. As some insurers begin to rollout this new technology, others will be running to catch up in order to avoid becoming a “soft target” in the marketplace.

James Ruotolo is an insurance fraud technologist, thought leader and the Principal for Insurance Fraud Solutions at SAS. Connect with him on Twitter or LinkedIn.