How public records data can tackle insurance fraud

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When it comes to fraud, insurers can never let their guard down. Indeed, with a recent survey by the Reinsurance Group of America indicating that almost seven in ten (68%) of respondents are anticipating an uptick in fraud in the next three to five years, they must become increasingly vigilant in the face of growing threats.  

Moreover, as insurance frauds take on new guises, and become more convincing and professional, the techniques insurers use to tackle them must also become more sophisticated. Tech tools that deliver deep and broad-based intelligence by improving access to public records data and using other smart identity verification and investigative capabilities are coming to the fore in uncovering crime. 

Emerging scams

Today, criminals are perpetrating a broader range of frauds than ever before, deploying digital means to do so. Age-old tricks such as lying on applications, making false claims, claims inflation or forging policy changes continue, but insurers are now having to grapple with identity theft, synthetic identities, fake evidence, and tailored phishing schemes, among other emerging scams. 

For example, criminals use stolen data such as email addresses and passwords that can be easily (and cheaply) bought on the dark web to commit ID theft, posing as legitimate customers to file fraudulent claims. Or they can create new, fictitious identities (synthetic IDs) using real and fake data, which they can then use to commit fraud. Without public records data or smart identity verification, it could prove difficult and costly to verify people. 

Criminals can even buy ready-made phishing scams on the dark web, which give them everything they need to commit cybercrime, including realistic fake company apps or webpages that steal people’s sensitive data or take their money for non-existent policies. Using artificial intelligence (AI), they can generate realistic fake insurance documents and credible deep fake audio and video clips of individuals which can be used for phishing or to circumvent security protocols.  

Digital detection methods

Investigators must continuously up their game to detect fraud. Recent years have seen fewer investigators out ‘in the field’ and more harnessing the power of technology to do the necessary legwork of verifying IDs, investigating dubious claims and flagging up suspicious activity. This allows them to achieve better results faster and more cost-effectively. So, they can put a stop to potential fraud quickly before claims payments go through, complete more (and more thorough) fraud investigations and risk assessments, or spend more of their time on other important work, such as developing fraud prevention strategy or working on complex claims.  

This isn’t simply about searching the internet or even digging manually into public records databases online, which are time-consuming and prone to key information getting missed or false leads being followed. This is about using dedicated tech tools to do the heavy-lifting of research for you, to ensure you have the most comprehensive, relevant, and accurate information readily available. 

For example, solutions that can automatically check through multiple public records databases, including social security, bank headers, vehicle registration or death records, in real time, and collate, verify and analyze the data they deliver, are invaluable in providing a robust, holistic overview of a subject. Some tools can scan sanctions lists and international media sources for adverse news or red flags to highlight potentially problematic issues pertaining to individuals or business entities that insurers should be aware of. By filtering searches and setting up alerts, you can be sure you’re getting the information you need, when you need it, so you can be confident about who you’re doing business with, on an ongoing basis. 

Additional capabilities can be layered on top to enhance public records databases, such as software that uses biometrics, behavioral analytics and enhanced document or phone number verification techniques to spot stolen or synthetic IDs, fake documents and images or suspicious activities. Increasingly, we are likely to see AI become more prevalent in this space, further enhancing what humans can do. 

Deep research for high expectations

Regulatory requirements put high expectations on insurers to protect customers, conduct due diligence on brokers, and prevent fraud. Furthermore, reputational risks and financial costs are associated with failing to stay ahead. Insurers must do everything possible to check IDs, detect scams, conduct detailed risk assessments and investigations, and stay alert over time  – all within tight budgets. That means getting the most from public records in an efficient manner to gain reliable insights, and using tech tools in innovative ways.

To learn more about these issues and solutions, download our e-book “Shielding the Future: Proactive Measures to Mitigate Risk and Prevent Fraud in the Insurance Industry.”  

Thomson Reuters is not a consumer reporting agency and none of its services or the data contained therein constitute a ‘consumer report’ as such term is defined in the Federal Fair Credit Reporting Act (FCRA), 15 U.S.C. sec. 1681 et seq. The data provided to you may not be used as a factor in consumer debt collection decisioning, establishing a consumer’s eligibility for credit, insurance, employment, government benefits, or housing, or for any other purpose authorized under the FCRA. By accessing one of our services, you agree not to use the service or data for any purpose authorized under the FCRA or in relation to taking an adverse action relating to a consumer application.