The vast majority of survey respondents (79 percent) say that the Special Investigation Unit (SIU) is the primary sponsor of anti-fraud technology initiatives. However, the departments often funding these projects were other internal units including claims, IT and corporate enterprise—with SIU funding 29 percent. While this close collaboration between departments is expected, according to the Coalition, in some organizations it may hamper the speed with which technology can be deployed due to additional approval processes.

While it is generally acknowledged that technology-based solutions can provide advantages in fraud detection, insurers still face challenges in deploying technology projects. Respondents named challenges such as lack of IT resources (38 percent), cost/benefit analysis (36 percent), proof of concept and unknown effectiveness (14 percent), acquisition and integration of data (seven percent), and legal and compliance issues (five percent).

However, according to the survey, it seems that technology is being adopted at an increasing rate. More than half of the insurers surveyed say they have begun using anti-fraud technology solutions within the last five years.

Among the organizations that embrace technology, most use a combination of anti-fraud technologies. The top three technologies survey respondents use are automated red flags/business rules (64 percent), scoring capability (60 percent) and link analysis (57 percent). Less than half of insurance companies use more advanced techniques such as workflow routing (43 percent), text mining (40 percent), predictive modeling (40 percent), and geographic data mapping (23 percent).

Anti-fraud technology relies heavily on the volume and quality of data used in the analysis. Many organizations use a combination of multiple legacy systems, spreadsheets, and external databases.

The most common source of information by far was the carrier's own claims data. Other popular data sources used are industry claims history data (69 percent) and public records (62 percent). An interesting figure to note is that 36 percent report they investigate social media for case leads. This figure is likely to increase as more insurance companies embrace this growing trend.

Less than five percent of respondents expect a decrease in their anti-fraud technology budget during the next 12 months, and nearly one-third expect more funds—all evidence that insurers recognize the importance of fraud detection.

Insurers' primary investments over the next 12 to 24 months include predictive modeling (33 percent), text mining (31 percent), and automated red flags (25 percent).

More insurance companies are using link analysis and social network analysis tools to identify fraud rings. Fifty-two percent of survey respondents say the major benefit of anti-fraud technology lies in uncovering complex or organized fraud activity.