Partner Article

Why the insurance industry should turn to artificial intelligence to help reduce fraud

Say the words ‘artificial intelligence’ or AI to anyone and you will probably get a blank look. Most people assume you are referring to a futuristic world of iRobot and space travel but actually AI has already landed on planet Earth.

Importantly, the AI we have developed is sophisticated and can be applied to any industry to increase efficiency.

For example, take the insurance industry. Every year the UK market loses £2.1billion to fraud, an enormous figure.

But the AI we have developed has the potential to help plug some of the gaps in the leaky walls of insurance companies.

With its unique ability to learn autonomously, AI can recognise duplicate claims by reading recognising and understanding key information. It’s a simple concept when you consider the average company receives around 3,000 unstructured documents everyday – and at least 25 per cent still originate on paper. This in itself is very labour intensive, let alone doing it quickly and efficiently to meet the high levels of customer service. And levels of incoming correspondence are increasing each year at a reported rate of 50 per cent.

If a duplicate claim is received, AI will sound its alarm bells by recognising that it has seen it before. And it doesnt have to be as obvious as the person’s name and address. AI looks for patterns so even if these details change there will be tell tale signs that AI can recognise.

Insurance fraud leapt by 600 per cent between 2006 and 2012, so insurers are now devoting increasing amounts of time to sifting and checking authentic claims from false ones. It is imperative the claims side of the business generates money and doesn’t lose it.

And because of its sophistication, artificial intelligence can also streamline clerical teams tasked with dealing with the swarms of incoming correspondence and free up the skilled workers to focus higher priorities such as fraud.

But insurance companies have been slow to take AI on board. There is a herd mentality and a lot of luddites lurking in this sector. Technologically streamlining a business will only work if the decision makers are on board.

The younger generation can often see the benefits but they are not the movers and shakers within an organisation.

Chasing fraudsters post pay-out is simply pointless as they are probably heading for the hills. And any chance of recovering the money is lost. The industry should invest now in effective AI solutions to help build the dam against the rising tide of fraud.

Written by Andrew Anderson, CEO of Celaton and developer of inSTREAM.

inSTREAM applies artificial intelligence to streamline labour intensive clerical tasks and decision making in a way that hasn’t been possible before. Delivered as a service, inSTREAM transforms the way that enterprises handle the unstructured content that flows into their organisation every day such as correspondence, complaints, claims, received by email, fax, post & paper. It enables scale and efficiencies that were previously out of reach and minimises the need for human intervention, ensuring that only accurate and relevant data enters ERP, CRM and accounting systems.

This was posted in Bdaily's Members' News section by Andrew Anderson .