The cost of insurance fraud is staggering with estimates ranging from $80 to 120 billion annually. Many insurance companies have started to take anti-fraud efforts more seriously in recent years, but why? Perhaps this is a result of better analysis to justify ROI or insurance executives are simply trying to hedge against what appears to be a growing threat. Whatever their motives, understand there are numerous reasons insurance companies should be taking a closer look at their special investigations unit (SIU), but more specifically, their overall fraud strategy.
But what is strategy in an insurance fraud context? Large-scale anti-fraud efforts are a relatively new frontier in the insurance world. Unlike marketing, underwriting, or customer service, fighting fraud has rarely gotten lots of attention, but the fundamentals of a good strategy are still the same. Collect information, form decisions based on analysis, and be willing to adapt as fraud does.
Unfortunately, some companies are taking a more arbitrary approach to the design of their SIU and overall fraud strategy, but here are some tips to ensure your company is on the right track:
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