The FINANCIAL — More than two-thirds (71 percent) of claims executives at European property and casualty (P&C) insurance companies have seen an increase in the number of fraudulent claims over the past three years, according to findings of an Accenture survey of more than three dozen P&C insurers across Europe.
Specifically, respondents reported an increase in the number of fraudulent claims of 10 percent, on average, over the past three years. The survey also found that more than one-third (39 percent) of claims executives believe that roughly 5-10 percent of claims paid by their organizations over the past year were actually fraudulent, but went undetected because of inadequate detection capabilities.
“We estimate that annual losses related to fraudulent claims could be in a range of €8 to €12 billion for the European P&C insurance industry,” said Thomas D. Meyer, managing director for Europe, Africa and Latin America of Accenture's Insurance industry practice and of Accenture Property and Casualty Insurance Services. “European insurers could save billions each year if they had appropriate fraud-detection tools in place. However, many insurers still depend on aging technology and insufficiently sophisticated analytics tools, which do not enable them to effectively detect fraud,” he added.
When asked what initiatives their companies plan to implement over the next three years to better prevent insurance fraud, the one cited most often – by 76 percent of respondents – was advanced fraud-detection techniques, such as predictive modeling tools that assess historical fraudulent claims and identify predictors of fraud. Next were “better support from IT infrastructure” (67 percent) and “enhanced data collection” (61 percent).
“Claims service is where an insurer today is put to the test in terms of its ability to delight or disappoint the customer, and it is therefore a key differentiator that helps build customer satisfaction and loyalty,” said Jean-Francois Gasc, managing director for Accenture’s insurance management consulting in Europe, Africa and Latin America. “The challenge for insurers is to be able to detect fraudulent or inflated claims while processing legitimate claims efficiently and fairly. A modern core claims system is essential to achieving these objectives, by enabling further automation of certain claims processes to accelerate claims settlement time, for instance.”
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