Insurers across the world are all too familiar with the with different ways they’ve been stung by the costly sting of fraud. But as rising costs continue to put society under pressure, a subtle type of fraud begins to seep through the cracks that is tricky to spot – opportunistic fraud.
In an attempt to make sense of this phenomena, fraud specialists often turn to the 10:80:10 model. 10% of policyholders will never be tempted to submit a fraudulent claim, 10% will always be tempted... and the middle 80% could be tempted depending on how much financial pressure they are under. And as we continue to head deeper into this cost-of-living crisis, insurers are about to experience the positive correlation between financial pressure and opportunistic fraud.
The initial and most important practical step for insurers is to recognise where fraud may manifest itself to defend against it. And, as with all types of fraud, the most effective battleground to identify and defend against it is during FNOL. And more specifically, eFNOL.
You can’t discredit the power of giving those circumstantially tempted by fraud a graceful way to escape their claim. In fact, this is the single most cost-effective way of defending against opportunistic fraud. This is because a robust digital claims process that’s designed-out fraud - particularly with use of live video which is impossible to edit unlike pictures – cause opportunistic fraudsters to feel that their detection is increasingly likely. The result…for single item valuables/electricals, over 35% consistently choose to withdraw their opportunistic claim.
This strategy encompasses the collection of as much information and evidence as possible within the FNOL process (including imagery and video) and then using this data for the purposes of claim validation and automated fraud detection.
This important distinction between initially focusing on opportunistic fraud ‘deterrence’ rather than detection can play a pivotal role on insurers’ bottom line. And whilst 360Globalnet is in a unique position to help insurers mitigate against fraud in general, we offer an array of tools which are particularly strong at ironing out opportunistic fraud.
Our multi-award-winning no-code digital claims technology enables our clients to design and build the robust eFNOL processes required to encourage opportunistic fraud claims to be withdrawn by the policyholder – the more you can do to make the claimant feel that their opportunistic fraudulent claim will be detected, the more will graciously withdraw their claim.
Our unstructured data technology, 360Retrieve, turns all data searchable, whether it be structured or unstructured. Further, it joins together all data sources including internal, external, industry and third-party sources, delivering a universal view of 100% of available data. Output is delivered in real-time to determine workflow decisions and case allocation, and this is all supported by customisable MI dashboards delivering analytical view on 100% of available data.
The technology’s flexibility means that claim journeys can be refined and improved at a moment’s notice without involvement from traditional IT departments. This enables claims handlers to quickly improve claims journeys and reduce the number of fraudulent claims.
Our With You in 5 (WYi5) team enables our clients to get out and ‘see customers’ quickly and at low cost, enabling them to get eyes on more claims.
Our virtual WYi5 technology enables even faster and cheaper eyes on the claim. Using the claimant’s phone, adjusters can live stream from the desktop to inspect damage.
360Globalnet’s WYi5 service is proving extremely effective at driving out fraud. We see a 7% withdrawal rate across all claims, and a 12% withdrawal rate in surge events.
To clarify, sympathy for individual circumstances can never cross over into accepting opportunistic fraud -the system only works if everyone plays fair. The aggregate of insurance premiums reflects the aggregate of insurance claims; no single fraud changes the aggregate, but thousands inevitably raise premiums for everyone.
Insurance Times recently shared their thoughts on how the insurance industry could demonstrate the downsides of opportunistic fraud to end consumers. It’s a timely piece that targets a real problem for insurers at a time that inflation is reaching every aspect of our lives. You can view the article here.
If you’d like to find out how we can help you deter opportunistic fraud, get in touch today.