Industries / Manufacturing

Warranty Claim Fraud

While warranty claims costs are tough to bear, fraudulent service/warranty claims make matters worse. Third-party service providers, which are steadily becoming the norm for field service support, provide operational costs savings but dramatically increase claims fraud risk. In addition, indirect costs such as tarnished brand reputation, replaced parts being sold on the black market, insurance costs and additional security needs make the problem even more expensive, costing companies an estimated $35 billion worldwide.

" Now that we're addressing suspicious claims activity, we're looking for other ways to use analytics to improve the consumer experience."

—Julie Tisera

Consumer Experience Manager

GE Consumer & Industrial

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How SAS® Can Help 

SAS® analyzes service claim data in near-real time using a broad array of analytic models along with busi­ness rules to identify probable suspicious activity. This allows you to:

  • Reduce service costs. SAS helps identify fraudulent activity with respect to claims submission or service costs by providing the automated means to look at every claim filed to detect suspicious claims and service providers.
  • Maximize effectiveness of auditors' time. By analyzing all service claims using standard business-rule engines and prioritizing them based on the likelihood of fraud, service organizations can focus on claims and service providers that will yield the most value.
  • Improve service network effectiveness. All service claims are automatically analyzed to score claims for suspicious activity and uncover patterns of inefficiency, identifying training needs and opportunities to share best practices.
  • Analyze and optimize parts usage. SAS includes automated analytics to detect patterns of parts usage that can be used to retrain technicians and save on parts costs.
  • Shorten time to implementation. These capabilities are available on demand via a secure, high-performance data processing infrastructure, with 99 percent or greater availability guaranteed in service-level agreements.

How SAS® Is Different 

Only SAS provides:

  • A hybrid approach to fraudulent claims detection. Business rules alone are insufficient to catch a significant amount of fraud, but by applying a combination of business rules, statistical tests and analytical models to all claims, suspect-claim costs can be significantly reduced.
  • Near-real-time analytics. This is the key to detecting issues and eliminating waste while not disrupting the adjudication process or slowing payments due for legitimate service.
  • Enhanced productivity. Auditors are highly trained, expensive personnel and their productivity is critical. By focusing auditors on the most suspicious service providers and claims, their time is used more effectively and their productivity increases.
  • Short time to value. SAS provides the solution on demand, resulting in short implementation time.

SAS® Solutions OnDemand offers a low-risk way to get business results rapidly, while distributing the investment predictably over time.

Related Products and Solutions

SAS® OnDemand: Suspect Claims Detection

SAS® OnDemand: Suspect Claims Detection analyzes service claim data to identify suspicious claims and service providers. Using dozens of automated analytic models built on the SAS Fraud Framework, the solution goes beyond traditional business rule engines to allow manufacturers and retailers to focus their auditors on the most likely sources of fraud. With the SAS OnDemand delivery method, business results are gained rapidly with minimal IT investment distributed predictably over time.

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Call us at 1-800-727-0025 (US and Canada) or request more information.