Aug 27, 2020
In this blog, Robert Harris, Global Product Manager, Insurance Fraud, examines how digitalisation is impacting counter fraud departments – particularly in today’s contactless society. He also shares some predictions for the future of the insurance industry.
2020 is the year that has seen the digital customer experience in insurance overtake more traditional channels in importance, like physical or phone-based interactions. For example, McKinsey has estimated that by going digital, a large auto insurer could more than double its profitability over five years.
But with digitalisation – and economic downturn – comes fraud. Trends spread fast in the digital world, so the early detection of new fraud patterns and scams is critical.
As we saw in 2008, sometimes even typically honest customers can resort to atypical (almost desperate) behaviours, seeking insurance pay-outs that they may feel they are ‘due’ after years of claim-free premium payments, for example
Predictions for the industry
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The COVID-19 pandemic has made it problematic, if not impossible, for Special Investigative Units (SIU) to conduct at-the-scene investigations and interviews. In the short-term, this could result in insurers being unable to deny fraudulent claims, especially in those countries where courts have either not yet developed a virtual capability or are dealing with a significant backlog.
But the pandemic has also led to some pioneering ideas and new ways of working. Digital technology such as geospatial mapping, satellite imagery and voice analytics are being used more readily, and it’s thought that they could actually deliver a better investigation result more cheaply and efficiently.
Digitalisation – both friend and foe
Our current state of rapid digitalisation is a force for propelling the insurance industry forwards. But it also provides fraudsters with new means to commit fraud. The use of digital technologies is essential for the contactless society which we now find ourselves living and operating in. Keeping good customers happy with effective and seamless customer experiences, while finding innovative ways of fighting fraudsters, is always going to be a fine balancing act, and it’s one that gets more complicated every day.
For more information about how the Insurance team at BAE Systems can help, get in touch.
(Editor's Note: The article was written by Robert Harris; original article here. Reposted with permission.)
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