The growing threat of fraud in the insurance sector poses an increasingly pressing challenge in the era of digital transformation. As we move towards a more connected and technologically advanced world, insurers are forced to confront a significant increase in online fraud attempts. In the year 2022, it was estimated that the 4.6% of all digital transactions globally They were suspected of fraud.
And although it is true that Spain has recorded a 31% decrease in fraud attempts, sectors such as retail have experienced an alarming 33% increase in cases of digital fraud, which demonstrates the adaptability of criminals to all types of sectors. and circumstances. For insurance companies, the implementation of artificial intelligence systems has become a vital tool to fight against this phenomenon.
More and more fraudulent claims
As experts point out, in the same way that hackers already use intelligent algorithms to find existing security gaps in insurance companies, they must use all the resources at their disposal to change the rules of the game and find effective protection.
In this sense, the US Anti-Fraud Coalition warns that insurers pay $308.6 billion a year in fraudulent claimsThat is, 12% of what they pay goes to claimants who are at least suspicious. All of this means that American insurance companies are allocating almost twice as much capital to this type of claims as they did three decades ago, a situation that is being extended to entities in Spain. And how is this phenomenon combated?
At this time, it is estimated that almost 60% of insurance companies They use artificial intelligence solutions to detect fraud related to the information collected in the reports that are claimed. And this investment is going to go further: the technological market for detecting insurance fraud is expected to increase to 17 billion dollars in 2028.
A recent study published by the AXA Research Fund determines that the rate of insurance fraud in Spain has doubled over the last decade, positioning itself in the 2%And while it is true that the vast majority of fraudulent claims to insurance companies reflect actual losses, the most worrying trend is that of a plaintiff adding exaggerated damages to the claim itself.
Machine Learning against fraud
This situation is encouraging the development of new “fraud detection” teams in companies, promoting, for example, the use of software platforms, which, thanks to having been trained with millions of images, are capable of recording the authenticity of the photographs they take. They are provided as evidence in these parts.
Before this, fraud detection programs work to collect evidence and evidence with which they can flag a claim as suspicious. To do this, they train the model with thousands of records that have been determined to be fraudulent in the past, so that they are able to detect anomalous behavior patterns. When applying machine learning systemsinsurance companies are no longer limited only to codifying the strict rules that the engine must follow, but rather they educate them to assimilate behavioral patterns.
At the same time, insurance companies are beginning to work with generative AI systems, which help them process and analyze all the documentation provided, facilitating the diagnosis and “probable” resolution of cases in this field.
In short, when used well, AI at the service of fraud detection can help them efficiently manage any type of claim that comes to them, increasing precision and consistency. In fact, with the implementation of an AI system you can achieve reduce claim review time by up to 58%, reduce the time spent reviewing documentation by up to 60% and drastically reduce risk exposure in the process of underwriting new policies.