How Big Data Stops Fraud in Insurance Industry?

Fraudsters are a thorn in the side of insurers almost forever. The moment they realize they can get money for nothing they will force their way into the system. It may seem like an issue for the companies. However, they prevent motorists from getting cheaper car insurance rates as carriers pass the costs to the customers. That is why stopping them will serve everyone well eventually.

Providers can be fast in hiking prices due to outside forces but they are usually very slow in sharing the savings they managed. In any case, it is better they take action and halt leak sooner and think about how the spoils will be shared later.

The Claim Processing Background

Nearly all automobile insurers have been gathering information on claims for a long time. So, they have plenty of usable information already. The problem was that they didn’t have a way of sorting it out fast and putting it in a usable format. Now there are computers and programs which can deal with this and much bigger data. They can easily take over the already digitized system.

Carriers already know the ways in which they lose money to swindlers. They can stop some of them by being careful and putting people onto those cases they suspect. This experience will be highly useful when it comes to teaching computers to recognize them. Hopefully, they will be able to automatically deal with them in time with machine learning. It isn’t hard for the platform to request extra information and look at it again. 

How Would Artificial Intelligence Come into It?

There are already digitized, fully automated claim software in working. They just need to be improved with artificial intelligence and machine learning. So, it isn’t like they are coming into a totally unknown area and revolutionizing it. They are just taking over the tedious work and reducing the number of false vehicle insurance claims falling through the cracks in the system.  

The thing is that human behaviour isn’t improving like computers do, not at the same speed anyway. So, they keep doing the same things that work to swindle companies and people. Once this pattern is identified and programs developed to recognize them out of all the claim applications, we would have a better chance of separating and dealing with them. This would actually speed up the claims of honest motorists.

Now, there is a totally new industry which is dedicated to gathering information from so many new sources, including looking at our online activities, shopping habits and communications. The good news is that all this information can be added to what the companies already have and create a very solid base. That is why they are after big data and cloud computing to handle it. Unfortunately, information is easy to gather and sold at very cheap prices to be used for many shady purposes. 

It is all about processing data as fast as you can, make sense of it, use it to predict future behaviour and put preventative measures in place. Just like programs that have been developed to catch spam emails. In the same way, they will give false readings too. That is where human experience comes and sorts the wheat from the chaff.

At The End

At the moment companies are under extreme pressure to raise auto insurance rates. These pressures would continue to be there unless they find ways to reduce costs and clog the leaks. Then they would be able to relax a bit and concentrate on improving their services. And they can get more confident in settling claims fast in the knowledge that the likelihood of them paying false claims is reduced. 

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