IBM’s Advanced Analytics to Tackle Property & Casualty Insurance Claim Fraud

IBM’s Advanced Analytics to Tackle Property & Casualty Insurance Claim Fraud

IBM (NYSE: IBM) announced today that it is putting advanced analytics to work zeroing in on fraudulent and abusive claims in the property and casualty (P&C) insurance industry. The IBM Loss Analysis and Warning Solution is designed to help protect P&C insurance companies from illegal, unethical, or undesirable activities by policyholders, service providers and employees. This is accomplished through a combination of data mining technology, data visualization techniques and a powerful scoring and anomaly discovery engine.

According to the National Insurance Crime Bureau, at least 10 percent of all insurance claims are either inflated or outright fraudulent, leaving the industry to pay out as much as US$30 billion annually in fraudulent claims. Recognizing the ultimate impact this fraud and abuse has on business and consumers, IBM designed the Loss Analysis and Warning Solution to identify fraudulent and undesirable behavior and provide data analysis capabilities for the P&C insurance industry.

This information can be used by insurance companies to detect a variety of unusual or suspicious behaviors such as inflated or unnecessary payouts to claimants, misuse by agents of policy discounts and detection of unusual claims charges and billing practices from service providers such as repair shops, doctors and hospitals.

With the new IBM Loss Analysis and Warning Solution, P&C insurance investigators create compliance models for claims, individuals and organizations expected to display similar behavior. The solution identifies normal behavior in these ‘peer’ groups and makes comparisons to rank and score members and identify unusual behavior. For example it would flag an auto repair shop that was charging for towing on nearly all repairs, while other shops had towing charges less than 20 percent of the time.

Read the complete Press Release