A new fully-hosted and managed service designed to help insurance companies improve their fraud detection processes
The total cost of insurance fraud (non-health insurance) is estimated to be more than $40 billion per year according to the U.S. Federal Bureau of Investigation.1 Insurance fraud can cost the average U.S. family between $400 and $700 per year in the form of increased premiums.2 And in the UK, 469,000 insurance frauds were detected by insurers in 2018, with a value of £1.2 billion according to the most recent figures released by the Association of British Insurers3 on their website.
The new Luxoft Financial Crimes Intelligence with IBM Technology is an end-to-end software-as-a-service solution for insurance fraud detection and investigation that integrates IBM Financial Crimes Insight (FCI), which runs on IBM’s integrated data and AI platform, Cloud Pak for Data. IBM FCI uses advanced analytics and machine learning to detect suspicious claim and policy activity across the “observation space” and routes that activity to an insurer’s investigative unit. Looking at counter-fraud operations across the entire lifecycle, the solution incorporates advanced analytics and investigative analysis throughout the entire process, with powerful “out-of-the-box“ machine learning models for fraud detection, and IBM Watson tools that enable clients to train new AI models for counter-fraud efforts.
As a result, Luxoft Financial Crimes Intelligence with IBM Technology is designed to enable insurance clients to develop new and advanced machine learning and AI fraud management models. The solution is hosted on the cloud, and made available via a subscription model. Luxoft Financial Crimes Intelligence with IBM Technology can be integrated into an insurer‘s existing product ecosystem (including DXC and IBM insurance products) in a seamless fashion. It can also be customized to provide a wide range of reports, alerts, analyses, extend investigative and case management tools, and enhance prediction.
“Insurance fraud has been around a long time and we know that recessionary cycles lead to a spike in fraudulent activity.4 This issue is high on insurers’ agendas, and we’ve been working with IBM to provide an end-to-end, integrated and fully managed solution,” said Nigel Cairns, Head of Financial Services, Luxoft, a DXC Technology Company. “This agreement builds on the longstanding collaboration between DXC and IBM, and provides an innovative and cost-effective new solution for insurers, giving them a detection tool to help deter, prevent and intercept fraud, helping to avert losses before they happen while speeding the settlements of legitimized claims.”
“As perpetrators get more sophisticated, we see the potential for insurance fraud continue to grow,” said David Marmer, Vice President, Offering Management, IBM. “But it all comes down to data, which is why we applied advanced analytics and AI to our RegTech portfolio, and FCI solution, in particular – to help clients identify and intercept claims fraud before it has a chance to bog down processes and cost people money. And it’s why extending our collaboration with Luxoft to marry our innovations is good news for the entire industry.”