Information Being Used for Good in Combatting Insurance Fraud
Sharing quality high density data and linking this with multiple related datasets is a critical part of identifying insurance fraud on a large scale in South Africa and is a prime example of how information can be used to benefit the industry.
This is according to Robin Wagner, Senior Vice President: Head of International Insurance Markets at TransUnion who says that anti-fraud organisations such as the South African Insurance Crime Bureau (SAICB) can detect and act on fraud networks or fraudulently excessive claims by utilising the Insurance Data System (IDS), an insurance industry information-sharing platform.
“Criminal networks often act across multiple insurers and can be so complex that they simply cannot be picked up by a single insurance company. When data shared by a group of insurers is centralised on IDS, there is a greater likelihood of being able to detect these patterns and use this information in subsequent criminal investigations,” Wagner says.
He adds that the effective use of IDS, which was initiated and developed by the South African Insurance Association (SAIA) in partnership with TransUnion, can increase underwriting profitability through the reduction of insurance fraud.
Garth de Klerk, CEO of SAICB, says that his organisation utilises data from the IDS in their criminal investigations, once it has been correctly, cleaned, interrogated and stored by TransUnion. This information is then run past several databases, including the South African Police Service’s wanted list and TransUnion’s auto information services bureau to connect cases and detect fraud patterns.
“Currently, we have over 55 insurance ongoing fraud investigations, with a quantum of claims in excess of R250 million, and this indicates why we are dependent on receiving data of the highest standard. It is crucial to have a partner like TransUnion which is equipped to handle these volumes of data and provide quality services in order help the insurance industry combat fraud,” de Klerk says.
The SAICB utilised IDS in its investigation against a network of 80 individuals who were conducting fraud by repeatedly claiming on cellphone insurance.
De Klerk says the network’s modus operandi was to move from broker insurance to the underwriting manager market and across various companies over time in order to avoid red flags appearing on individual fraud detection systems. He believes a single company would have been unable to identify this pattern.
Wagner and de Klerk agree that insurance companies can further assist in the fight against insurance fraud by improving the quality of data they provide to IDS. Quoting and data capturing are two processes which need to be prioritised in order to improve data quality, ensuring all information acquired is registered accurately.
Wagner concludes, “It is clear that information from IDS can be used for good in the fight against insurance crime. In order to take this to the next level and strive toward eliminating insurance fraud, we need to ensure that the data shared with us by insurance companies is of the highest quality.”
About TransUnion (NYSE: TRU)
Information is a powerful thing. At TransUnion, we realise that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
We call this Information for Good.