With bogus insurance claims, shady brokers and fraud on the rise, insurers in the US have resorted to artificial intelligence (AI) as a safeguard, according to a report in Fast Company.
The report, citing Federal Bureau of Investigation (FBI) estimates, said that these problems collectively cost insurance companies more than $40 billion yearly. This figure excludes medical insurance fraud.
This has also translated into a rise in insurance premiums paid by consumers towards healthcare, homes and care, as insurance companies eventually seem to be passing on the burden to the consumer.
AI can help in spotting inconsistencies and unusual patterns.
The new-age technology, as per the report, is proving to be effective in specific cases that include rigged car accidents or individuals overstating the worth of damaged property as part of the claims procedure.
“You can’t not have machine learning and predictive analytics for claims,” Jim Guszcza, US chief data scientist at Deloitte Consulting, was quoted ss saying.
Some US-based companies such as Lemonade, a startup that offers home and rent insurance, is adopting the technology to weed out false and staged claims.
According to the company’s chief executive Daniel Schreiber, AI helps it evaluate and pay out claims significantly faster than many traditional insurers. In around one-third of cases, claims are approved and paid out instantly on approval by its proprietary algorithms, he added.
According to the report, the technology can also help tackle other complex frauds that include groups of connected people filing similar claims, perhaps with overlapping networks of doctors or lawyers, about injuries from deliberately staged car accidents.
Last week, Indian software services provider Wipro said that it was partnering with big data analytics firm Opera Solutions to launch an end-to-end solution to address the issue of fraud, waste, and abuse in healthcare insurance claims in the US.