How home claims handlers prevent fraud and save costs using domestic media
AM Interviews Friss' Wouter Joosse on partnership with eviid
As Wouter Joosse, Friss’ itinerant product manager considers the global insurance industry, he is struck by how progressive the sector is in the Netherlands. Innovative, digital and automated. Still, according to him, there is still a lot to gain. According to Joosse, there is a task for insurers to increase fraud awareness among ordinary claim handlers, while expanding their options. For example, using of photo and video material in the claims handling process.
Insurers who work with Friss fraud detection software receive a Friss score on their claim reports. Green is no problem. An orange score could be an indication of particularities, and with red all alarm bells go off. Joosse estimates that about 95 percent of claims flare up as green : ergo, pay out as soon as possible. Red is also clear. But what do you do with orange? Friss tries to convince insurers to integrate a plugin from partner Eviid into the Friss score.
Eviid automatically assesses the authenticity of images.
It is therefore not necessary to submit a photo with every claim. "We have thought that we will announce this trip after the damage report," says Joosse. “If an orange score passes, we can automatically send a signal to Eviid, where the end user is asked to take a photo or video of the damage. You can upload that photo yourself to the insurer, but you prefer to use the Eviid app. That is a closed ecosystem. There is no possibility that the photos there will be affected. ”
The fraud funnel How much proven fraud does Friss actually get from the claim flow? According to Joosse, not to go into detail we could say that “we create a fraud funnel with this system. A certain percentage of irregularities are received and we mark a certain number for the claims handler. After some control questions, we are happy when approx. half of these claims are actually researched and we are satisfied when 50% of these proven as fraud”. Joosse emphasizes that proven fraud is not the only quality indicator. “For example, we measure the claimed value versus the paid-out value of the peril as well. Not to mention the time savings in claim settlements. ”
What properties does the system check the photos for? “The photos, include the location data, plus the date and time of the recording. We are currently focusing on confirming or disproving a claim based on that metadata. In the longer term, we also want to be able to interpret the photo automatically. So see if a photo is submitted as glass damage, it should actually show theglass damage. That’s the future. ” The system works the same for videos. Joosse prefers policyholders to submit a video of their claim rather than a photo. “Video provides much more context of damage than one or two photos. One should not just zoom in on the damage. A sweep from left to right is better, so that a claims handler gets more context than just a picture of that wet spot on the ceiling. ”
Broader deployment than fraud detection Friss is currently in discussions with three Dutch insurers to add Eviid’s technology to the services. Joosse notices that companies prefer to use the technology more widely than just for fraud detection. For example, having a customer send verified photos and videos themselves could make a large part of the physical expertise unnecessary. “The conversations are often about that. Should this project be led by expertise, damage or will the research department use the product? From a fraud perspective, I don’t care who provides the photos. I just want them. ”
How do you prevent people from feeling treated as a potential fraud? “That is something that insurers often fear. I think you should make a choice: or you make a video and we handle your claim very quickly, or we can send an expert along including the extra time this will take. This story is easily explained to the end customer. ” According to Joosse, requesting photos and videos works preventive as well as fraudsters suspend their claims prematurely as soon as they are asked for images. Insurers also have a lot of control over prevention. “Through Friss we see that the speed of a settlement is a factor in the fraud rate of a claim. In many cases, nothing is wrong with a claims report. But because an insurer responds slowly, or repeatedly asks for additional information, you notice that people are stacking the claims, exaggerating amounts, because they feel they have to put a lot of work into it. If an insurer acts faster resolving the claims, the quantity of fraud cases decrease. Many claims can also be handled automatically. ”
Also paid automatically? “Certainly. If the claim is covered, insurers should focus on handling it as quickly as possible. I think it is more important that the insurer says: I want certainty on certain points. Am I paying a fraudster? Am I sure I’m not paying for previous damages? Am I sure that the claimed amount is correct? If these questions are all marked, you must pay immediatel, regardless of the amount of the claim. With Friss, we can add a lot of speed and certainty to that process. ”
Suspicion of fraud is one. Proving fraud is a time consuming and expensive process. How do you avoid overloading departments with notifications? “First of all, if someone is fraudulent and you have proof, you have to investigate it. But prior to that there are a lot of steps in a settlement of which I think: here you could also have managed the claim. Confront people in an earlier phase with the facts. You do not immediately need a fraud investigator for that. A claims handler can also ask: “We see several of the same types of claims. Please explain that. “If someone doesn’t have a compelling story, you don’t pay out.”
Do you want to know everything as an insurer? “That is a moral question. That is the conflict we often face between a fraud department and a claims department. Claims will say: “I want to process as quickly and efficiently as possible. I don’t need to know things that are not relevant. “While a researcher will say,” I want to see everything. “It’s a mix. When we are in a process to implement Friss, we get a lot of historical data, which then shows what we would have detected. Then we can fine-tune the system to the available capacity. But at that time we notify the insurer as well: you did not spot these events. Regularly the historical data shows us blind spots. Do you want to see that? Because if you start to observe this, it means detection is raised by half a percent and that will cost you 2 FTE extra. It is a constant game: what do you ignore and what do you detect? We ignore many deviations, but these are deliberate choices. ”
Still: will you extensively investigate a fraud if the interest is very low? “We play around with that more often. Some insurers even use internal settlement models. If a claims department files a fraud case, it simply costs money. I think that you can do a lot of guidance here, even in claims handling. If a claims handler thinks: “There is clearly something going on here, this is wrong from all sides, but I cannot prove it.” Then you could also make a very low proposal. He claims 500 euros, but only 100 euros is covered. That is the “clapping hands” that must take place. Are you going to start an investigation for the 100 euros? If the customer persists and he will increase the claims amount even more because you are under settling, you need to make an appointment with the fraud department of course.”
According to Joosse, there is a task for insurers to increase fraud awareness among ordinary claim handlers, while expanding their options. “This is a theme that we include with every project. Hence those videos. In this way you enable a claims handler to do more than just hand it over to an expert. In any case, it should not be a shared responsibility between different departments, because then a lot falls between two stools ”
Do you have to re-educate insurers regarding the claims-handling process? “Sometimes this subject is raised with customers. Are they going to try Friss with one or two employees, or are they entangled in some sort of claims 2.0 project already? We have noticed that there are already many initiatives with insurers. It is certainly true that our product is much more efficient if we are involved in it. It also depends a little on who is the buyer of our product. If that is the investigation department, then claims handlers are no longer allowed to settle claims. We also have customers where the claims department has insight into the detection results and they can follow it up. We prefer the latter. My main goal is: include photo and video in the process. That is the message I will continue to spread from Friss.”