Where human capabilities fail

Allianz Insurance uses an analytics solution to uncover insurance fraud

The most common insurance fraud is vehicle-related, including simulated car accidents and inflated damage claims. But owners of immovable properties or households are also testing insurers’ internal audit mechanisms. With the right fraud-detection system in place, you can save millions. Allianz Insurance has proven that.

Maya Mašková, the head of the Internal Audit Department at Allianz, says they needed to replace their outdated fraud-detection system with a modern analytical solution that would reduce the time and resources required while improving their success rate. “We needed to automate more of the process,” says Mašková. “More importantly, we needed assurance that we were finding the suspicious behavior.”

The users can browse through all of the monitored elements giving us a real boost in savings and efficiency.
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Maya Mašková
Head of the Internal Audit Department

Seeing what you can’t see

Allianz Insurance chose the SAS® Fraud Framework for Insurance because it uses a hybrid approach to sift through the data. The solution uses multiple statistical techniques to look at the data from all angles. “SAS uses embedded analytical models to uncover things that the human brain cannot,” says Mašková.

Suspicious behavior is identified automatically and made available to investigators every day. “These cases are given a priority rating so the investigators can focus on cases with the highest probability of fraud or highest potential financial damage,” says Mašková.

Another very important capability helps Allianz investigators reveal social networks – this is particularly useful in uncovering organized fraud. The system presents a visual of the links and relations of all entities associated with the suspicious case. The investigator can now see connections that couldn’t be found using routine examination techniques.

What’s the payoff?

There are a lot of benefits to using this hybrid approach: savings in claims compensations, increased number of identified fraud cases and improved operating procedures. And the work of investigators is easier now. But there’s an even more important benefit – organized insurance fraudsters tend to avoid Allianz now.

In the first six months after implementing the solution, Allianz identified 1,161 insurance fraud cases worth more than CZK 62 million. That was 426 fraud cases – and CZK 10 million – more than in the same period of the year before.

Other benefits:

  • Investigated 26 percent more cases.
  • Submitted 40 percent more proven fraud cases for criminal prosecution. 
  • Saved about CZK 110 million a year by reducing the number of fraudulent claims paid.

“The decision to choose SAS was a good one. We’ve been able to expand the number and type of insured events that we examine. The users can browse through all of the monitored elements giving us a real boost in savings and efficiency,” concludes Mašková. “We’ve even uncovered some major organized fraud groups.”

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Challenge

Increase the efficiency of the claims investigation and get more assurance that the right claims are being investigated.

Solution

SAS® Fraud Framework for Insurance

Benefits

  • Identified 1,161 insurance fraud cases worth more than CZK 62 million in the first six months after implementation.
  • Investigated 26% more cases.
  • Submitted 40% more proven fraud cases for criminal prosecution.
  • Saved about CZK 110 million a year by reducing the number of fraudulent claims paid.
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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