Preventing a crisis from being an insurance fraudster’s paradise

February 28, 2024

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There’s a reason why UK insurers invest at least £200 million each year to identify fraud — it’s now the most reported crime in England and Wales, according to the Association of British Insurers (ABI). Even as government agencies and insurers step up their fraud detection processes and pursue widespread efforts to mitigate it, fraudsters show no signs of letting up — they’re only changing their tactics. 

Despite these challenges, we do know that the majority of claims are valid, and part of what matters to genuine policyholders is that suspect claims are quickly identified and tackled. With the right fraud detection tools and strategies, we can better support and protect genuine customers. 

UK fraud trends

On its face, some may feel relieved by the current fraud landscape, as 2022 saw a 19% drop in the number of fraudulent insurance claims uncovered since the previous year. However, this stat alone is deceiving. Despite the decrease in detected fraudulent claim volumes, fraudsters’ behavior has shifted from low-value, attrition-level, opportunistic fraud that produces low returns — spillages, or losing a thousand-pound watch, for example. They’re now carrying out higher-value schemes. The resulting financial implications for insurers only solidifies the need for sufficiently trained investigators and robust counter-fraud tools in place.

Striking a balance

A solid counter-fraud strategy boils down to two things: humans and technology. One cannot do its job effectively without the other. On one hand, humans are necessary to develop closeness with the claimant, exhibit empathy and genuinely strive to understand their plight. As investigators interact with customers and provide a human-centered approach, technology tools supplement the latter half of the invisible counter-fraud strategy. Rather than a days-long, human-to-human investigation that only gathers a fraction of the evidentiary results, tools use sophisticated data-based detection algorithms to assess and flag risks — far more accurately and quickly. 

This dual approach, with multiple layers of protection to fill stopgaps, allows detection to continue while keeping the claims process moving forward.

Adjusters strike the delicate balance between asking questions without coming across as aggressive or accusatory. This ensures that each claimant has a positive customer service experience and ultimately feels cared for. Investigators must approach each case with empathy to ease a claimant’s difficulties post-crisis. 

Harnessing counter-fraud tools

Most people think of counter-fraud tools’ main purpose being that they spot fraud. That is true, a small percentage of the time — however, what the tools accomplish the other 95% of the time is allowing genuine customers to have the smoothest, quickest journey possible through the claims process. 

As fraudsters take more sophisticated steps to avoid fraud detection, Sedgwick uses, among other tools, artificial intelligence (AI) to stay ahead — identifying virtually all types of fraud, from individual actors to sophisticated fraud networks and providing detailed reasoning and actionable background information for fraud risks. It can be powerful in examining data exchange.

As the human investigator asks the claimant questions and tries to understand their sentiment — something data cannot determine — tools simultaneously are doing their job of finding data-backed evidence of risk that supplements the investigator’s findings, and vice versaIt is important that genuine customers do not feel they’re being interrogated or suspected of fraudulent intent — the real scrutiny goes on in the background, as technology analyzes risk factors and verifies each step of the claim.

Staying one step ahead

In some cases, before a crisis event takes place, data can help identify customers that are more likely to pose a heightened risk. This type of counter-fraud strategy, along with AI and other tech, can improve the claims process and outcomes. Organizations must adopt a ‘machine and human’ partnership approach, rather than look upon the challenge as ‘machine versus human’. Digitising the claims process isn’t the primary solution in terms of tackling fraud; it takes two — technology combined with human interaction — to significantly impact fraud rates. The best practices outlined in this blog can stop opportunist and organised claims fraud in the UK and around the world.

Learn more > read the flyer to learn more about our fraud claims service and bookmark Sedgwick connection for the latest insights from industry leaders around the world.

Ian Carman, director, UK investigation services, Sedgwick

Sedgwick’s fraud strategy saves nearly £50m for clients in 2023

February 26, 2024

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LONDON, 26 February 2024 – Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, has reported that efforts tied to the company’s international claims fraud strategy saved its clients £49.4m in 2023.

The first quarter of 2023 saw continued double-digit inflation, which placed added financial pressure on motorists, homeowners and businesses alike, and contributed to an 8% increase in claims identified as suspect across Sedgwick’s UK book of business. Further, the average cost of investigated claims increased in 2023 — an uplift driven not only by inflation, but also by a spike in fraudulently exaggerated, high-value escape of water claims made during the UK’s winter freeze event in 2022.

“Over the past three years, the value of savings delivered to our UK clients has grown by 73%,” said Ian Carman, Director of Sedgwick’s UK fraud and investigation services operation. “This is testament to our unrelenting effort to identify dishonest claims, which in turn protects our clients and their honest customers from the cost of fraud. 

“I’m pleased that our ability to deliver these results, which relies on a blend of sophisticated counter-fraud technology solutions and colleague expertise, has been achieved without any detrimental impact to the customer experience. We continue to adapt our strategies to identify and tackle new and emerging fraud risks to deliver better results for our clients and their customers.”  

Steve Crystal, Head of Sedgwick’s international fraud and investigation services, noted that regulators are taking greater interest in fraud and abuse oversight, and global markets are, in turn, focussing more on financial stewardship. 

“We’re seeing a growing appetite for mitigating the threat of fraud internationally,” Crystal said. “At Sedgwick, our emphasis remains on strengthening our capabilities with cross-border activity across all product lines. Whether insurers have a global presence or operate solely in local markets, the common denominator is that claims fraud is increasingly viewed as bad news.” 

Amid shifting economic and regulatory conditions, Sedgwick’s experts have observed a recent increase in organised fraud rings, which continue to adapt how they target financial services. For example, many are taking inappropriate advantage of the rising popularity of transactional, embedded (no additional charge) insurance benefits, such as travel, medical and purchase protection offerings, by operating across multiple geographies.

“Fraud doesn’t sit neatly within borders,” Crystal said. “We encourage markets to explore collaborative opportunities for sharing their findings while maintaining appropriate levels of local protection and compliance.”

Later this year, Sedgwick in the UK will further enhance its offering with the launch of an innovative suite of technology solutions expected to transform claims fraud risk identification.

“We’re pleased to continue strengthening our fraud strategy internationally and providing proportionate and ethical investigation services around the world,” Crystal said. “This lies at the heart of how Sedgwick helps clients protect their valuable assets and the majority of their customers who make genuine claims.”

About Sedgwick

Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

Evolving attitudes toward insurance fraud

January 4, 2024

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Insurance plays a critical role in our society and economy by providing protection against risk and uncertainty. Every day, the insurance industry makes people whole again after something unexpected occurs. Regrettably, there are a few bad actors who attempt to take advantage of this trusted system by committing insurance fraud. While the majority of claims are completely legitimate, as many as 10% can raise suspicions and merit further investigation. 

This blog will aim to define what constitutes insurance fraud and highlight some of the latest trends. Additionally, we’ll offer a glimpse into our research on the rise of fraud and the role of generational differences in attitude toward fraudulent activity.

What is insurance fraud, and how bad is it?

Insurance fraud is a crime and distinct from malingering or abuse in that it must contain four specific elements. For those of us who work to combat insurance fraud, “Got MILK?” is not just a catchy advertising slogan; it’s our daily mantra, as fraud requires:

  • Materiality: The misrepresentation must be material to the claim, such that the truth would lead to the claim being handled differently. 
  • Intent: The claimant must intend to commit fraud. 
  • Lie: Evidence of lying distinguishes a fraudster from a malingerer or an abuser.
  • Knowledge: The claimant must know they lied and that doing so validates or enhances their claim for financial gain. 

Fraud includes such things as submitting a new insurance claim for damage previously incurred to your home or vehicle or filing for workers’ compensation for an injury unrelated to your job. The Coalition Against Insurance Fraud estimates that the amount lost to insurance fraud in the U.S. each year is about $309 billion. Just 10 years ago, that number was $80 billion a year.

Understanding the sharp increase 

The past few years have given rise to a great deal of anti-corporate sentiment in America. Many people today negatively view insurance companies as large employers who seek to deny coverage in order to turn a profit. They see corporations as faceless and increasingly automated. They detect an opportunity to get paid for this perceived imbalance of power and lack of caring and oversight, and who better to pay than an entity considered to have deep pockets. This attitudinal shift regarding responsibility and “fairness” has also fueled alarming trends like social inflation, litigation spikes and nuclear verdicts, as explained here

Some misguidedly view insurance fraud as a justifiable and “victimless” crime. However, it actually hurts us all, as fraud costs American families nearly $900 a year in additional insurance premiums. It also diverts resources away from those truly deserving of benefits, coverage and support in their time of need.

Varying attitudes toward fraud

With insurance fraud on the rise, our special investigation unit (SIU) leaders were curious to know whether age is a significant factor in this trend. We hypothesized that younger people (Generation Y — born between 1980 and 1994 —and millennials/Gen Z, born in 1995 or later) would be less likely than their older counterparts (baby boomers and Gen X) to view claims fraud as an egregious crime and more likely to pursue such activity. To explore our hypothesis, we did some digging into a combination of data sources, including Statista, the Coalition Against Insurance Fraud and 13 years’ worth of anonymized SIU files. What we found took us by surprise. 

In actuality, surveys show baby boomers (born 1945-1964) have similar attitudes about fraud to those in Gen Y, while Gen X (born 1965-1979) has much in common with Gen Zers. What informs their perspectives, in essence, skips a generation. 

Our findings can be explained by some of the traits these generations tend to share. On the whole, both boomers and Gen Yers favor the collective/team, are relationship-focused and doggedly pursue their goals; Gen X and Z, on the other hand, are more individualistic, autonomous and focused on work-life balance. This distinction in outlook gives the former groups a broader understanding of the societal impact of insurance fraud, while the latter groups may be more likely to focus on the individual impact.

Education is key to prevention 

There are, to be sure, many more nuances to this research than were provided in the synopsis above. (Anyone interested in the details of our findings is welcome to contact me for more information.) In my view, the overarching takeaway from our research is the troubling incidence of fraud and popular belief that falsifying an insurance claim is a harmless crime. That the national cost of fraud has gone up nearly 300% in 10 years shows that society has lost sight of the proper value of insurance.

Nearly one-third of the past decade was lost to the era of COVID, when people had minimal face-to-face interaction, saw a significant increase in automation, and experienced severe economic setbacks. Collectively, we lost a natural sense of order during the pandemic, and that includes an appreciation for the purpose of insurance. As that order continues to be restored — with many workers returning to offices and everyone adjusting to the new post-COVID “normal” — it’s never been more important for insurance professionals to demonstrate their commitment to taking care of people while sharing the latest trends and research findings.

We in the insurance industry have a lot of work to do in (re)educating the public about the societal value we’re intended to provide and the harm caused by attempts to fraud the system. Both the Coalition Against Insurance Fraud and Association of Certified Fraud Examiners offer valuable informational resources on the dangers of insurance fraud and what each of us can do to curb this alarming trend.

Learn more — read about how the efforts of Sedgwick’s special investigation unit (SIU) help companies combat claims fraud and promote financial and reputational stability

The pandemic may have ended, but unemployment fraud isn’t going away

December 5, 2023

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recent report from the U.S. Government Accountability Office (GAO) highlights the scope of unemployment insurance (UI) fraud during the COVID pandemic, when claims for supplemental government relief programs increased sharply. The total amount of COVID-era unemployment fraud is estimated to be between $100 billion and $135 billion, representing approximately 11-15% of all UI benefits paid during that period. Industry experts fear these estimates are too low, as many state agencies were so overwhelmed during the pandemic that their calculations may be unreliable. The GAO report states, “The full extent of UI fraud during the pandemic will likely never be known with certainty.” 

Now that unemployment claims are leveling off, states are redoubling their efforts to recover overpayments and improve their detection of fraud. This blog will aim to shine a light on recent trends and what jurisdictions, employers and individuals can do to address system vulnerabilities and curtail unemployment claims fraud.

Finding imposter claims

Before COVID, states’ fraud monitoring systems focused primarily on detecting inconsistent information from bona fide claimants regarding their employment separation and wages. Amid the economic downturn associated with the pandemic, unemployment agencies scrambled to quickly distribute expanded benefits and cover additional workforce categories, such as gig workers, independent contractors and self-employed individuals. With unprecedented demand (as outlined below), states could not react fast enough to update their computer systems to check for imposter claims — presenting a huge opportunity for fraudsters to exploit.

Systems are being modified to catch the fraud techniques that targeted Pandemic Unemployment Assistance (PUA) programs in order to protect unemployment programs in both the short and long term. States are now flagging claims for nearly 50 potential fraud indicators, like out-of-state bank accounts, duplicate email addresses and multiple names using the same bank account number. They are also on alert for bad actors who hack into systems to gather names, Social Security numbers and birth dates from the dark web and launder money from fake claims through online cash apps and legitimate bank accounts.

By the numbers

More than 60.8 million unemployment claims were filed in the U.S. in 2020, compared to 11.3 million in 2019. The 536% year-over-year increase is largely attributable to labor market conditions related to the pandemic. According to the Federal Trade Commission (FTC), the same period saw a 1,750% increase in reported cases of identity theft related to government documents and benefits like unemployment. The economic turmoil has since settled post-COVID, and totals for initial unemployment claims filed (allowing for seasonal adjustments) went down to nearly 24 million in 2021 and about 11.3 million in 2022. Based on filings through the month of November, the 2023 total is expected to be between 10.5 million and 10.9 million claims. 

However, unemployment fraud remains a pressing concern. To use Ohio as an example, the state’s Department of Job & Family Services (ODJFS) reported identifying $6.9 billion in unemployment overpayments as of June 30, 2023; included in that amount are $1 billion in fraudulent PUA overpayments and $185 million in fraudulent payments from traditional unemployment programs. Through collaborations with financial institutions and law enforcement, the State of Ohio has successfully recovered about $48.6 million in fraudulent overpayments (including $21.5 million associated with PUA overpayments) and $255.5 million in non-fraud overpayments. ODJFS has instituted a series of systematic anti-fraud measures to prevent future leakage. 

Knowing what to watch for and what to do

Imagine getting a letter in the mail telling you about your unemployment benefits when you still have a job. It might look like junk mail appearing to come from the IRS or from your state’s economic security, employment/unemployment or reemployment agency. The mailing might appear to include:

  • A notice from the state about an open claim for unemployment benefits
  • A bank “pay card” referencing unemployment benefits
  • A PIN code from the unemployment department
  • An IRS reporting form 1099-G indicating the total amount paid during the prior tax year
  • A letter stating that a claim was filed for an individual and that you were their employer

Not only is this correspondence puzzling; it may leave you wondering what to do next. Awareness of these fake mailings and the proper next steps to take is key. If you receive information about a claim that you suspect is fraudulent, report it right away and make sure you’re not dealing with a larger issue of identity theft. Appropriate courses of action include:

  • Reporting the suspicious mailing to your state’s unemployment agency (a searchable database of state websites is available here) or to local law enforcement
  • Utilizing the U.S. Department of Labor’s unemployment insurance fraud reporting website
  • Protecting your credit by setting up a fraud alert and/or credit freeze
  • Monitoring your credit using protection services like Experian and TransUnion
  • Using the reporting and recovery resources on the Federal Trade Commission’s identity theft resource site
  • Proactively verifying with your state’s unemployment agency that an unemployment claim has been filed

Individuals with questions about possible unemployment fraud should be directed to your state’s unemployment agency or your employer’s human resources department. 

Employers should remain on alert for suspicious activity in connection with unemployment claims for current or former employees or for people they don’t recognize. Anything that raises a red flag should immediately be reported to the relevant state unemployment agency. We also recommend providing employees with information — such as this resource from the IRS — about the risk of identity theft involving unemployment benefits and measures they can take to protect themselves.

Learn more — read about how Sedgwick’s unemployment compensation solutions help employers control costs, reduce fraud, maintain accurate records, and take care of current and former employees

How AI is transforming the pharmaceutical industry

August 22, 2023

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Artificial intelligence (AI) has been utilized for some time now in the pharmacy setting, but it has evolved significantly in recent years. So much so that pharmacies can better predict drug effectiveness, identify potential side effects, quicken time-to-market for emerging medications and even design new drugs. AI has the potential to better patient outcomes and create more informed pharmacists.

Increasing efficiency in pharma operations, fraud detection

AI can be a powerful tool to save time, reduce stress and avoid pharmacist burnout. We’ve already seen a surge in robotics-assisted fulfillment and pharmacy kiosks for contactless dispensation, but technology is becoming more advanced to now predict in-store foot traffic, peak service times and whether patients will pick up their prescriptions on time. Expansion of robot-powered fulfillment is gaining momentum as it helps alleviate basic inventory and bottling tasks, sync inventory more closely with pickups, minimize inventory waste and the mundane tasks of restocking unclaimed meds, which contribute to burnout.

Considering the promise that artificial intelligence tools bring to this branch of pharmaceuticals, we are likely to see more partnerships between software companies that have strong AI competency with organizations in the healthcare space specializing in clinical administration, documentation of clinical trials, and hospital documentation.

AI is also hugely beneficial for its fraud detection abilities. AI can analyze sales and prescription data to track instances of fraud. If a pharmacy is ordering from a vendor, AI can track and identify potentially fraudulent activity by looking at sales and purchasing data — and determine whether it is related to a pharmacist or a pharmacy.

AI improvements for patient safety, outcomes

Artificial intelligence is useful in identifying key trends for patients and tailoring it to their specific needs. It can provide personalized recommendations for medications that might be needed to complement their current prescriptions — such as instances where medication side effects need to be counteracted, for example. Extensive databases can be analyzed to identify safety signals and adverse drug reactions that may not have been detected during clinical trials. Sophisticated algorithms can review patients against study protocols and identify eligible candidates for clinical trials — offering faster, more informed and safer medication choices.

AI can also assist in quickly identifying which patients will need a consultation prior to dispensation. Software like Drug Utilization Review (DUR) flags whether a prescribed medication might be dangerous for patients when combined with one of their existing drugs. It allows pharmacies to stay updated on potential risks for specific medications, enabling them to provide informed counseling and monitoring to patients. This technology improves overall patient safety and outcomes.

AI-powered chatbots have also increased information access for patients regarding their medication. Chatbots serve as a critical tool for patients to receive answers to common questions about their medications quickly, without needing to schedule an in-person consultation. Robotic collaboration also frees pharmacists to practice the clinical services — such as immunization, counseling and medication management — that are integral to patients’ health.

Impacts on research and development

On the research and development (R&D) side, early drug development has already been influenced by AI. One foundational reason for the high costs of medications is because of the extensive amount of research and time that goes into development. AI can analyze data from pre-clinical and clinical studies — in real time — to identify trends to aid with future development. Researchers are using it as a tool to decipher which molecular entities should be considered for early-phase clinical trials by screening thousands of molecules for how they interact with target proteins. This significantly speeds up the evaluation process in early-phase clinical trials.

Thanks to AI algorithms, researchers can analyze genomic data, disease mechanisms and protein structures to pinpoint and validate new drug targets and determine which areas of the body a specific medication can help. This not only assists with discovery, but can also aid in designing safer clinical trials, as pre-existing data is informing the development process.

Ultimately, AI can fast-track and streamline R&D, which leads to improved patient outcomes and lower medication costs. Additionally, natural language processing (NLP) can assist with processing unstructured data in clinical trials, to make the information more digestible to analyze.

It is of course important to consider the potential bias that surrounds AI in R&D. Artificial intelligence only knows the data its been provided with from previous trials. Certain information might not be applicable to every patient, depending on the population sets it is collected from. But as AI continues to evolve and gather more data from clinical trials, it will only become a stronger tool for R&D. We’ll continue to monitor emerging trends regarding artificial intelligence and keep a close eye on how they impact the pharmaceutical industry.

Sedgwick’s enhanced global fraud strategy saves clients over £1m in 2022

March 6, 2023

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LONDON, 6 March 2023 – Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, announced that efforts tied to its dynamic international claims fraud strategy saved £1.23m for clients in 2022.

Sedgwick has an established programme in the UK and U.S. markets for handling the challenges that can be presented by claims fraud. Over the past three years, Sedgwick has witnessed a growing appetite in other territories such as France, Ireland, and the Netherlands to mitigate the threat of fraud, with an emphasis on strengthening capabilities with cross-border activity across all product lines. Based on 2022 data, Sedgwick’s fraud experts anticipate that against a backdrop of uncertainty, false and suspicious claims activity will continue to rise.

“Countries are at different stages of their claims fraud journeys; some are in their infancy, while others are more advanced,” said Steve Crystal, international head of claims fraud for Sedgwick. “Notwithstanding the challenges of differing legislation, regulation, compliance, culture and market approach, there’s one common denominator: no matter the location or language, claims fraud is unwelcome news.”

Sedgwick continues to support and enhance fraud strategy in additional markets and cites these examples.

  • The Asia market is making good progress. Sedgwick is working with insurer clients in Hong Kong and elsewhere to help them strengthen their approach.
  • In South Africa, there has been longstanding recognition of the issues at play — resulting in an advanced approach to fraud detection and containment. The Insurance Crime Bureau estimates that up to 30% of claims contain some element of concern.

Sedgwick’s investigation team has discovered cases of organised fraud across products not commonly seen in the UK and U.S., such as insurance-backed credit card protection schemes, and the targeting of products sold globally with losses in remote locations. They have also identified a growing international focus on data residency and privacy regulation. Because fraud does not sit neatly within borders, markets are encouraged to explore collaborative opportunities for sharing their data and findings while maintaining appropriate levels of local protection and compliance.

“The majority of claims are completely valid, but we must not underestimate the resolve and determination of fraudsters who are looking to beat the system,” Crystal said. “Our experts are highly trained in quickly identifying and handling suspicious claims. To bolster their efforts, Sedgwick continues to invest in technology and advanced programmes to assist them. Our approach is geared to tackling those who seek to find ways to bypass detection measures, with our experts interpreting what the analytics are telling us.”

Tackling fraud in insurance claims: global observations

February 16, 2023

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By Steve Crystal, Head of claims fraud – international, Cert CILA APCIP

The UK and US insurance markets are well established when it comes to the challenge of tackling claims fraud, but what about the rest of the world?

Well, there’s a growing appetite among insurers – those with an international presence, as well as those who only operate in their local markets – to mitigate the threat of fraud. Primary goals tend to be similar: to protect reputation, and to help retain their genuine customers. And over the last couple of years, we’ve seen a third goal emerge in part driven by organised criminals extending their activities beyond their traditional territories. This goal — to have the ability to conduct cross-border investigations, across all product lines — shouldn’t be approached lightly, as regulations, systems and geopolitical concerns can all have an impact on plans and outcomes.

Different experiences, similar stance

In my experience, countries are at different stages of their claims fraud journey — some are in their infancy, while others are more advanced. But notwithstanding differing legislation, regulation, compliance, culture, market approach and policy wordings, we share a common denominator — our risk attitude toward claims fraud. No matter our location or language, it’s seen as bad news.

For example, I’ve noted parts of the Asia market are at the outset of their journey — an area where there’s unrivalled enthusiasm and a passion for a partnership to tackling the issue. We’re actively working with clients in Hong Kong, where we’ve introduced resource and strategy, to help insurers strengthen their approach.

At the more advanced stage of the journey is, say, the South Africa market, where there’s been a longer-standing recognition of the issues at play — resulting in a hankering for fraud detection and containment. In fact, the market’s representative body, the Insurance Crime Bureau, previously reported that South Africa has a markedly high claims fraud incidence, estimating that up to 30% of claims contain some element of concern. That staggering estimate is the highest I’ve seen anywhere in the world, and certainly a reason to major on tackling risk.

Against this backdrop, however, we know the majority of claims are valid, and part of what matters to genuine policyholders is that suspect claims are quickly identified and tackled – a good platform and mandate to accept the challenge of defeating would-be insurance fraudsters. Best practices can stop opportunist and organised claims fraud in Asia, Africa and around the world.

Think global, act local

We’ve adopted a ‘think global, act local’ mentality for helping colleagues and clients tackle the challenge of claims fraud. It’s vital to recognise there isn’t a one-size-fits-all approach. Key stepping stones are to win hearts and minds, strengthen processes for claim screening and, above all else, work in partnership. There’ll always be different languages, time zones, opinions and cultures to consider, but embracing them is a key driver for solutions and opportunities.

A trend we’ll continue to watch across the global landscape is the growing focus on data residency and privacy regulation. Fraud doesn’t sit neatly within borders, so we must find ways to share our findings and data with each other and take advantage of the benefits of cross-border collaboration while maintaining appropriate levels of local protection and compliance.

The application of technology

Technology in the world of claims fraud has been gaining momentum lately. In fact, this is probably the topic I was asked about most when engaging with colleagues and clients in 2022. Whilst technology enhances fraud detection, it’s not the silver bullet, and won’t ever be the complete solution. Interpretation of what the tech is telling us is paramount – making human intervention fundamental. As noteworthy as the technology is, it can’t be a substitute for a trained claims handler, so we must first ensure colleague process, skills and a measure of empathy are in place. Leading with our caring counts philosophy, there’s a need for human engagement throughout the claims process to improve our chances of detecting fraud and to appropriately connect with individuals through an investigation.

Claims fraud doesn’t always lend itself easily to statistical analysis because the rules of the game aren’t fixed. Perpetrators think differently — often randomly — and motives/methods change. Technology can be used to help us flag patterns, cross-references and anomalies in claims, but a level of personal interpretation helps us get to the heart of what the tech is telling us and ensures the correct customer journey is supported.

Looking ahead

Fraudsters who deliberately invent claims will no doubt invest energy to find and exploit weaknesses in fraud defences — including tech. Organizations around the world mustn’t underestimate fraudsters’ determination to beat the system and, in response, should adopt a ‘machine and human’ partnership approach, rather than look upon the challenge as ‘machine versus human’. Digitising the claims process isn’t the primary solution in terms of tackling fraud; it takes two — technology combined with human interaction — to significantly impact fraud rates.

Stay tuned for upcoming blogs from my colleagues, Linda Wisneski, SVP of specialty operations, Americas and Ian Carman, director and head of investigation services, UK.

Learn more > read the flyer to learn more about our fraud claims services.

Imagine 23: highlighting industry trends for the year ahead

January 24, 2023

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By Kathy Tazic, managing director client services

Sedgwick’s industry experts and thought leaders are committed to keeping our clients informed on emerging challenges, opportunities and industry news. We’re excited to introduce our Imagine 23 list, which highlights topics and trends employers, risk management and human resource professionals, brokers and carriers should watch throughout the year.

Imagine solutions for people…

Organizations have grown more responsive to the needs of their workforce and customers across the world. As we settle into agile work models and address ongoing health and productivity challenges, employers are imagining ways to find stability. In pursuit of healthy workplace culture, we expect to see new options for onboarding, collaboration, inclusion and benefits. We anticipate the emergence of hyper-targeted programs designed to improve outcomes and experience.

Imagine solutions for property…

Property challenges span from the specific to the complex to the obscure. We’re in an era of specialty expertise, investigations and tools to help loss adjusters and claims professionals address the details. Technology is allowing us to reimagine the way we work, collaborate, communicate, adjudicate claims, manage data, add value, fight fraud, and reach improved outcomes. Carriers and risk managers will need the right tools, expertise and partners to be prepared for coming challenges in climate, coverage and continuity.

Imagine solutions for brands…

Operating in a globalized and connected environment, organizations must be acutely aware of the changes occurring around them — in regulations, technology, consumer preferences, supply chains — and the complexities they bring. Failing to keep up can create gaps in safety, compliance and coverage and take a toll on brand reputation. In the year ahead, we imagine added value coming through proactive prevention, data protection and ESG-inspired transformation.

Imagine solutions for performance…

Economic factors remain top of mind, but organizations can imagine ways to persevere. This year, we’re tracking the impact of inflation, monitoring litigation trends, and suggesting strategies for managing claims performance. We’re preparing for potential geopolitical pressures. We’re anticipating growth in automation, outsourcing and training needs as the labor market shifts. We’re using technology and data to redefine quality in the claims process. And we’re utilizing the power of relationships to identify opportunities and adapt quickly as the landscape changes.

What do you imagine for the future?

Take a closer look at the Imagine 23 list and Sedgwick’s industry thought leadership at thoughtleadership.sedgwick.com and share your thoughts with us on LinkedInInstagram or our other social channels. We look forward to continuing the conversation and sharing insights with you throughout the year.