Using Analytics to Prevent Underwriting Fraud
May 22, 2013 – Recent studies have shown that insurers lose approximately 10 percent of their total revenue to premium leakage and underwriting fraud. In 2010, rating errors reduced private passenger auto insurance premium revenue in the US by $15.4 billion. But underwriting fraud is not exclusive to personal auto insurance. It affects most lines of business, especially commercial auto insurance, workers’ compensation and property insurance. This paper covers the different types of underwriting fraud and how insurance companies are implementing technology and analytics to combat this growing issue.
This white paper discusses how insurer are using analytics to prevent underwriting fraud. Insurance fraud continues to be a major issue for all insurance companies. To combat this issue the current focus of most insurance companies has been on detecting and preventing claims fraud. However a significant amount of insurance fraud is associated with underwriting fraud. Application fraud traditionally has been the poor cousin of claims fraud. Rate evasion is probably the most widespread form of underwriter fraud.
Read the white paper here (PDF).
About the Author
Stuart Rose is global insurance marketing director at Cary, N.C.-based SAS. Rose, a 25-year veteran of the insurance industry, began his career as an actuary. He has worked for a global insurance carrier in both its life and property divisions and has worked for several software vendors, where he was responsible for marketing, product management, and application development.
Stuart is a regular contributor to insurance publications and the Analytic Insurer blog, as well as co-author of the book Executive Guide to Solvency II. He frequently speaks at insurance conferences and will deliver a presentation on Big Data at the 2013 Insurance-Canada.ca Technology Conference.
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions, SAS helps customers at more than 60,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world The Power to Know®.