According to broker’s “best” and “worst” verbatim responses in this year’s Insurance Times Broker Service Survey, insurers who act quickly to verify and settle claims are their preferred partners. This year’s importance scores reveals brokers are placing a stronger emphasis on claims in comparison to previous surveys. Those instances where straightforward claims are processed quickly and a cheque is issued in a matter of days, without quibbling or delays, foster both customer and broker loyalty.
However, insurers ability to process and settle claims is frequently put to the test, not least as a result of the high levels of fraud prevalent in personal lines claims. The Association of British Insurers (ABI) estimates claims fraud costs the industry £2billon a year and within motor alone, £466million. The industry has been fighting back, sharing data via initiatives such as CIFAS (the UK's most comprehensive databases of confirmed fraud data) and the Insurance Fraud Register (IFR).
In the future, access to these fraud databases will help insurers and brokers flag suspect individuals at the point of quote. It will allow them to quickly identify individuals who may have been associated with previous claims fraud or who have been dishonest in other ways, e.g. committing application fraud. Research suggests that individuals who misrepresent themselves at the application stage are more likely to commit claims fraud.
Claims “triage” or decision-tree management is helpful in determining which claims can be approved speedily while isolating those that require further investigation (potentially because they have been made by an individual who misrepresented themselves during the application phase, for instance). As well as being used in fraud detection, such systems are also effective during peak claims periods, such as in the aftermath of winter storms and floods earlier this year.
Between December 1 and February 19, the wettest winter on record in the UK, brokers and insurers received £6.7million a day in insurance claims from customers hit by flooding. Sixty per cent of the 18,700 flood claims have now been fully settled, according to the most recent ABI figures.
SAS recently carried out research - “Insurance Companies: Are You Equipped to Successfully Combat Fraud?” - which showed that, despite a rise in global fraud, two-thirds of European insurers saw the volume of detected fraud increase by less than four per cent. The online survey revealed that those insurers that do not use automated detection, or only use ‘business rules’, saw significantly lower levels of detected fraud than their peers using advanced analytics.
SAS Analytics offers insurance companies a suite of solutions to improve fraud detection and enable claims handlers to improve business performance throughout the claims lifecycle through the more efficient use of data. Find out more at www.sas.com/insurance.
