The insurance company is using artificial intelligence to reduce its payments to fraudulent claims.
New Allstate AI technology is being used to help slash the number of times fraudsters get away with making claims.
Insurance fraud has become an $80 billion industry in the United States, forcing premiums skyward.
Fraudulent claims in the U.S. are currently estimated to be worth more than $80 billion every year. Legitimate customers are required to cover the cost of the payments that scammers are receiving through higher premiums.
Among the reasons that insurance fraud has risen is that digital claim filing has made it somewhat easier. While it has meant that the process is more available and convenient for customers, it’s also helping scammers to slip their claims into the system and receive payments without detection. That said, Allstate is using AI technology to help spot fraud before the insurance company – and its customers – pay the price for it.
The Allstate AI technology helps to better scan claims while overcoming typical adjuster biases.
Fraudulent claims are believed to comprise as much as 10 percent of all payouts made on insurance claims. Insurers are taking extensive actions to try to minimize this problem while keeping both their customers and their operations safe. About 95 percent of insurers are aiming to use technology to help mitigate the damage from fraud. These solutions are far from able to eliminate the fraud, but the hope is that artificial intelligence will play a role in maximizing the potential of technology in this area.
Artificial intelligence and data can provide an aggressive path to spot likely instances of fraud. Allstate has boosted its digital screening using an AI-based solution to monitor digitally submitted claims and flag those that appear to be suspicious. At the same time, it can also keep watch for trends in fraudulent activities, though not nearly as accurately as humans at the moment. Therefore, the insurer has not replaced humans in its fraud detection but has instead used the technology as a complement.
Allstate AI is used to identify potential cases of insurance fraud so human specialists can take a closer look and decide which ones should be investigated and spot trends as they develop.