We have discussed the need for good governance and a strong organization to support insurers’ anti-fraud processes and related activities.
Managing fraud cases effectively, however, requires a sound framework to connect processes and enhance process quality. The Accenture fraud framework encompasses risk mapping and assessment, learning and training, detection and triage, investigation, recovery and sanctions, and closing.
In developing a framework, insurers should keep in mind that fraud can be committed at different stages within the insurance transaction process and by different parties. It can involve the insurance applicant as well as policyholders, third-party claimants and professionals who provide services to the claimants.
Fraud can occur during the underwriting process – for example, by applicants providing false information – and can also occur during the claims process. Examples taking place during the claims process include “padding,” or inflating actual claims; misrepresenting facts on an insurance application; submitting claims for injuries or damage that never occurred; and “staging” accidents.
Some key practices related to the processes include:
- Maintaining periodic reviews to reassess the risks and their controls, concentrating on selected levels such as business entity, line of business, region and others.
- Defining action plans to correct weaknesses in the controls.
- Detecting fraudulent claim registration and block payments in case of a confirmed fraud case.
- Analyzing each fraud case to understand the fraud mechanism and determine the root cause.
Once the right operating model is in place, the insurer should look to a reliable methodology for implementing anti-fraud processes. We will review the elements of such a methodology in our next post.
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Other parts of this series: