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Reducing P&C fraud with the latest digital tools

How to give your SIU team the best tools it needs

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Property and casualty (P&C) insurance fraud adds up to over $30 billion annually, affecting an insurer’s bottom line significantly. Best-in-class firms use fraud technology and a range of data sources to detect, analyze, and prevent fraud from occurring.

Introduction

Kill the opportunity, kill the fraud

Insurance claims fraud is a business, adding up to over $30 billion annually. What’s more, it supports a lot of illicit activities, like money laundering and terrorism. But smalltime crooks can also seriously affect an insurance firm’s bottom line when they commit fraud because they need money during bad economic times.

Criminologist Donald Cressey is a renowned expert on organized crime (Charles, January 2016). He interviewed convicts and created the so-called fraud triangle (see Figure 1), which many people in the insurance industry now use to determine why someone commits fraud. It suggests that for fraud there are three linked factors. They are (Biegelman and Bartow, 2006 p. 32–36):

  • Rationalization: The way that people justify their actions—for instance, their frame of mind, their concepts of right and wrong, their upbringing and how they feel about getting away with something.
  • Motive: The reason why a person commits fraud, such as greed, debt, drug/alcohol abuse, and so on.
  • Opportunity: The person’s ability to conduct the fraud in the absence of controls, oversight, and technology.

White Paper

Reducing P&C fraud with the latest digital tools

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