Insurers are facing continued uncertainty about profitability, along with pressures on pricing and low interest rates on their fixed-income investments. In this kind of environment, there is an unceasing search for p&c carriers to find ways to control costs and improve overall risk management.
Fraud control is an area with strong potential for increasing insurers' profitability. According to an Accenture survey of European P&C insurers, during the last three years 71 percent of respondents experienced an average increase of 10 percent in the number of fraudulent claims processed. Fraudulent claims are on the rise for North American insurers, as well, with Aite Group reporting that nearly $80 billion in fraudulent claims are made each year in the U.S. alone.
The insurers we surveyed estimated that better fraud detection capabilities could reduce as much as five percent of their total claims costs. Since this is money that goes almost directly to the bottom line, it is well worth exploring how insurers can improve their detection and prevention capabilities without adversely affecting the processing of legitimate claims.
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