Insurance Sector
Navigating Complex Challenges with Innovative Solutions
Globally, insurance fraud is the second most practiced fraud, right behind tax fraud. The field of insurance is vast, and fraud exists in every area. Claims are by far the largest expense for insurance companies, making them attractive targets for fraudsters. Insurance companies are pressured to protect their resources by managing and optimizing the claims process, minimizing the risk of fraud, and ensuring long-term sustainability.
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Fraud detection tools must cover the entire investigation process, including understanding and detecting potential red flags such as Key Fraud Indicators (KFIs) and Key Risk Indicators (KRIs). RAALS, as a predictive tool for insurance claims processing and analytics, offers insurers a competitive advantage by helping them make the right decision at the right time. This differentiation from competitors leads to measurable ROI and intangible benefits such as improved customer satisfaction.
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Unfortunately, as the scale of the industry grows, so does its appeal as a target for criminal activity. The Coalition Against Insurance Fraud (CAIF) estimates that fraud costs in the insurance sector amount to as much as $80 billion a year.
PROBLEM
Insurance fraud, combining detected and undetected cases, is estimated to represent up to 10 percent of all claim expenditure for insurance companies. According to The Coalition Against Insurance Fraud, global insurance fraud costs roughly 80 billion euros annually. Furthermore, a CAGR (Compound Annual Growth Rate) of 17,4% is expected during the forecast period (2021-2026). This statistic is concerning not only for insurance companies individually but for the entire society. Fraud is a fund of criminal activity, causing the rise of premiums for honest customers and creating skepticism towards the institution. As the number of frauds and similar incidents is rising at an alarming speed, it becomes inevitable for companies to have proper measures to fight back. 85% of insurance companies already incorporate fraud investigation teams. These teams are facing an enormous amount of structured and unstructured data. They need to be analyzed and monitored in the right way, in order to gain insights and detect potential fraud.
SOLUTION
RAALS is the most advanced fraud prevention platform for the insurance sector available today. Developing and implementing user-friendly claim procedures is the most important consideration because data management security is essential in avoiding fraudulent claims. RAALS is a prevention and investigation tool that is already saving millions in the world’s leading financial institutions where it has been implemented. Working with big data and forward-looking models like RAALS, insurers can perform statistical and rapid analysis to better understand the key drivers of risks in insurance claims. It delivers the step-change required in the accuracy, efficiency, and speed with which fraud is predicted, detected, and investigated. Simultaneously it enhances the satisfaction levels of policy-holders and brokers by expanding valid transactions and eliminating potential disputes during the policy lifecycle. Generally speaking, fraud leakage reduces profits by 10 - 12%. With RAALS’ breakthrough technology more than half of this loss can be prevented. The corresponding improvement in the loss ratio is over 6%. This transforms the fraud management department into a key driver of profits in a highly competitive market sector.
