A new FICO insurance technology solution marries link analysis, business rules, and predictive analytics.
FICO has introduced a new form of insurance technology that is designed to help to cut back on the $50 billion problem from fraudulent claims.
The product is designed to assist insurers to overcome the increasing claims fraud issue that is costing billions of dollars every year, which is therefore causing rates to rise in order to compensate for the additional losses.
This new insurance technology product is called the FICO Claims Fraud Solution.
It brings together three different technologies to allow insurers to more easily recognize a fraudulent claim when it occurs, so that the general amount of fraud losses each year can be slashed down from their current global level at an estimated $52 billion, says the data from research and advisory firm called Celent.
Over the last few years, insurance fraud has skyrocketed as a result of the struggling economy.
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It has been a plague in many different sectors, including in auto insurance, which is one of the worst hit and has broken records all over the world. In the United States, an estimated 10 to 20 percent of the price of insurance premiums is the direct result of the additional losses experienced by insurers due to fraud. In other marketplaces, such as Brazil, that percentage climbs to as much as 25 to 30 percent.
The FBI discovered a single fraud scam in February which had cost insurers $279 million.
Similarly, the Association of British Insurers in the United Kingdom has stated that their insurance fraud is costing policyholders an estimated £2 billion every year.
Now, those insurers will be able to use the insurance technology provided by the FICO Claims Fraud solution in order to integrate three important techniques in order to identify more fraudulent claims before the payments are made. It utilizes state of the art predictive models that are based on the human brain’s neural networks. This allows for more accurate identification of fraud at the initial point of sale or even at the first loss notice so that insurance companies won’t be required to make any fraud payments at all.