CASE STUDY

Claims and FraudA case for data science inhuman behavior patterns

CompanyA Large Insurance Carrier

ChallengeClaims Management andFraud Detection

SolutionInsurance Analytics Cloud

The ChallengeA large Insurance carrier was facing a number of challenges with claims management and fraud detection.

First, the company had amassed a significant amount of claims data through the years. However, the data was difficult to consolidate and use. The information resided in five different legacy claims applications, and the insurer had no enterprise-wide view of claims.

Second, the insurer’s claims team was unable to perform any real time analysis. A claim is considered ‘the moment of truth’ for policyholders. Churn and dissatisfaction are directly correlated with an individual’s experience with how expediently their claim is processed and settled. It was, therefore, essential to optimize the claims process.

Third, there was a dire need to automate existing fraud models and build system that would provide effective fraud prevention techniques to mitigate premium leakage.

Specific pain points• Manual process for claims investigation• Inability to analyze claims quickly before payout• Customer data spread across multiple legacy applications• Inability to tie new data sources into investigations• Data acquisition and integration challenges• Lack of a user-friendly interface for searching and reporting• Inability to analyze unstructured data (text), which constituted 75% of available data• A frequent “gut-feel” approach to assessing claims and fraud

CLAIMS AND FRAUD: A CASE FOR DATA SCIENCE IN HUMAN BEHAVIOR PATTERNS

The SolutionThe Insurer used Insurance Analytics Cloud, which is phased, agile, and iterative. With this method, the company was able to realize ROI in shorter cycles, rather than at the very end. A phased approach also ensured a smooth transition, and allowed for data accuracy validation on the go. A glass claims conversion pilot was performed and later built upon.

Key Business Outcomes The claims team at the insurer was ecstatic. What would have been a multi year project was implemented successfully in half the expected time.The key benefits were:

Once claims data was integrated and optimized, we had to address the crucial need for automation of fraud detection. Fraud models were operationalized and new types of predictive models were applied to improve the fraud detection process. Insurance Analytics Cloud generates a fraud score, a powerful mean of identifying which claims to focus on. A propensity score is generated through analysis of historical patterns and machine learning.

“Prior to this project, we were only able to refresh a small amount of claims data. Now we have more data, and we can see it in real time. We can see things as they are happening. we can’t act on it as fast as we are finding it.”

Enterprise Analytics Lead

Integrate claims data from multiple legacy system to a single, enterprise-wide system

More accurate fraud detection, which leads to better customer experience and higher retention

Lifting of Validated Claims Fraud Flags from 3.7% to 8.1%

Upto 20% improvement in settlement time and 15% reduction in fraudulent claims

Potential for 2.2% points Loss Ratio improvements within twelve months

Our Innovative method of data transformation and analytics succeeded in accomplishing two key objectives in close succession

Create a claims data warehouse for analytics, reporting and downstream application

Speed of Implementation

> Aggregated Enterprise datasets in eight weeks rather than the traditional six months

> Claims fraud operationalization in four weeks

Headquartered in Silicon Valley, and with over 2 decades of experience in helping clients achieve their business goals using data and analytics, we have unparalleled expertise in the science of transforming data into actionable knowledge. Through our pre-packaged, cloud-based AI and ML solutions we bring faster time-to-market and low incubation cost advantages to our customers. We have deep expertise in the science of fusing disparate data silos, joining data in new ways and leveraging both structured and unstructured data to create an abstraction that delivers cuttingedge insights for our customers. We help our customers achieve highly impactful business outcomes like faster settlements, lower expenses and losses, and superior customer experience through the use of data-driven insights.

900 E Hamilton Ave. Suite 200 Campbell, CA 95008 +1 (408) 371-1900 / +1 (888) 205-3500 business@insuranalytics.aiwww.insuranalytics.ai

Copyright © 2018 InsurAnalytics.ai