What the coronavirus can teach us about fighting insurance fraud
It is vital that insurers share more information, avoid fraud-spreading practices and never surrender to scammers.
As the world continues to deal with the fallout from the coronavirus, it occurred to me there may be some analogies that fraud-fighters may draw from this worldwide pandemic to help us better understand our own battle against insurance fraud.
Bad things can spread worldwide quickly
No one had heard of what is now the world’s most-famous virus only a few months ago. When we did, the virus appeared isolated and far away. Worldwide travel and commerce, though, quickly turned a local outbreak into a worldwide crisis.
A few decades ago, insurance fraud was primarily local. Then it began to spread to regions and nationally. Today, insurance fraud is a global concern. International fraud is spread not via personal contact, but mostly technological “contact.” The internet and new technology now permit fraud to be committed from anywhere and spread globally very quickly. Programs such as BAE’s Global Insurance Fraud Summit and the IBM/ALFA Paris Symposium are drawing together anti-fraud leaders from around the globe to work more closely together.
Masks don’t work
Experts tell us that using a mask is not the best way to protect yourself from the coronavirus. Masks actually help to keep bad germs inside us, we are told.
Many insurers and even SIU professionals still seem to like the idea of “wearing masks.” For all the talk of information sharing and open communications needed to fight insurance fraud, insurers and regulators are some of the worst at sharing data.
Fear of a competitor gaining an advantage or that sharing information is too risky — even when strong immunity statutes are in place — too often lead to refusals to share information that would protect consumers and insurers alike from frauds and scams.
The Coalition also has seen an unfortunate drop in regulators and insurers sharing data with 100% confidence for needed and valuable research. It seems everyone wants the research data but fewer are willing to drop their “mask.” The reason may be nothing more than fear.
Don’t shake hands … with fraud
Shaking hands spreads germs, but is an accepted part of Western culture. Have you thought about whether you and your organization are “shaking hands with fraud/?” We rail against dishonest medical providers, body shops and the like. But what about insurer practices such as “price optimization.” Rates are increased not based on risk but on the perceived willingness of certain consumers to pay more since they don’t shop their policies for a lower price.
Or, how about using defense attorneys whose ads boast claims such as, “Every claim is fraudulent until proven otherwise” or “We will go to battle to make sure you don’t have to pay.” Many insurers today like the idea of using “preferred vendors” for auto and home repairs. How many, though, do any in-depth analysis to see who those vendors actually “prefer?” Do they treat policyholders and claimants fairly, or just seek ways to lower payouts?
If we face reality, many in our profession are more than willing to “shake hands with fraud” if this makes us look good or increases profits.
There is no cure
There is no vaccine or cure for COVID-19, at least now. Yet we don’t see the world simply throwing up its collective hands in surrender and accepting the virus as being inevitable forever.
When it comes to insurance fraud, though, these often are the arguments used to slash budgets, reduce personnel and declare the need to just declare insurance fraud as being an “acceptable” part of the insurance world. The cost can simply be underwritten and passed to consumers via higher premiums.
While we may never eradicate all insurance fraud (or all diseases), we cannot just raise the white flag of surrender. If we unite, our impact could be tremendous. We’ve allowed insurance fraud to become an accepted part of the insurance world. Insurer ads directly tell consumers other insurer ads will deny your coverage and not pay your claim. Thus, consumers too often feel they must resort to fraud simply “to get even.”
Could we change that collective view? Drunk driving deaths in American decreased by 60% in the 20 years after MADD was founded. They used public-outreach campaigns, legislative initiatives and court decisions to change the attitudes of American consumers from acceptance to fighting back. Imagine the impact we could have on insurance fraud if we committed as a profession to do the same.
So as we continue to watch the fight against COVID-19 unfold, let’s think about what this tiny molecule of a virus has done to impact our world — and what it may teach us for the future of fighting insurance fraud.
Matthew J. Smith, Esq. is executive director of the Coalition Against Insurance Fraud. This piece is reprinted with permission from the Coalition Against Insurance Fraud blog. Opinions shared are those of the author.
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