ATLANTA — A new insurance industry research study reveals that insurance carriers saw an increase in consumer digital activity across both underwriting (77%) and claims (76%) during the coronavirus pandemic and indicated this recent increase in digital activity has in turn spurred more identity fraud activity, according to 67% of survey respondents. Authored by Aite-Novarica Group and presented by LexisNexis® Risk Solutions, a leading provider of data, advanced analytics and technology for the insurance industry, the Insurance Fraud: Rethinking Approaches in the Digital Age report provides advice for carriers on how to identify vulnerabilities and ways to mitigate these vulnerabilities, while providing the ultimate customer experience to genuine consumers.
The survey focused on identity fraud prevention subject matter experts and decision makers at U.S. insurance carriers across life, personal (auto and home), and small commercial lines. Participants were asked to identify reoccurring points of entry for fraudulent individuals/activities and to share their thoughts about how carriers can better protect their underwriting, customer service and claims transactions without inhibiting the digital experience. The study reveals that as insurers seek to achieve business goals tied to digital transformation and place increasing importance on customer experience, they should evaluate their fraud strategies and capabilities across underwriting, customer service and claims, which needs to include implementing a multi-layered and comprehensive fraud mitigation strategy.
“Our experience tells us the largest drivers of identity fraud for insurance are a combination of purely digital transactions and the increased availability of consumer data whether on the dark web, social media or online consumer portals across all industries,” said Kim Brown, director, insurance identity access management solutions, for LexisNexis Risk Solutions. “Even as consumers opt for digital interactions, they still expect their policies, accounts and transactions to be protected against fraud. Similarly, some carriers expect digital activities to continue to grow over the next 12 months, and therefore need to invest in advanced identity verification and fraud mitigation solutions to ensure their business and their customers are protected. These identity verification and fraud mitigation solutions provide the dual benefit of helping carriers identify and flag discrepancies in the submitted data proactively, while providing carriers the ability to identify and fast-track genuine consumers with confidence”.”Cost of Enhanced Customer Experience
Aligning solutions that can provide identity verification and authentication can help carriers avoid unnecessary risks, provide genuine consumers with a faster, low friction experience. Being able to systemically isolate the higher risk, carriers can now make better decisions across their workflow and defend their brand and their customers from cybercriminals and potential fraud.
“In order to bolster their defense against fraud throughout the policy life cycle, carriers need to ensure that their solutions accurately identify and prevent fraud from the point of entry, which will require multiple capabilities and a multi-layer approach,” said Michael Trilli, practice leader, insurance, for Aite-Novarica Group. “For carriers evaluating their current fraud strategies, I recommend looking for ways to merge data from multiple sources, combining fraud solutions to validate identity verification, and adopting processes to authenticate and escalate all potential security risks.”The report outlines five recommendations to help carriers stay a step ahead of fraud before it impacts their bottom lines:
To read the full report on Insurance Fraud: Rethinking Approaches in the Digital Age, click here.
Visit LexisNexis Insurance Fraud Solutions to learn more about the company’s identity access management and fraud prevention offerings.
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LexisNexis® Risk Solutions includes seven brands that span multiple industries and sectors. We harness the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit LexisNexis Risk Solutions and RELX.