One of the eminent challenges that are affecting many insurance providers around the world today is the increase in the cases of insurance fraud. Taking into consideration the pricing pressures related to the slow economic environment, cutting back the claim payout will improve the effectiveness and reduce the cost involved. The claim function is the one that is being affected mostly by the issue of insurance fraud. Many companies use the claim processing effectiveness to see out their services which affect their overall performance. Minimizing the overall cost and preventing the fraudulent insurance activities should be the primary focus of the insurers to ensure that they are safely running the firm. Management steps and procedures should be developed with the aim of curbing the fraud activities.
Ensure that the fraud and management procedures and strategies are laid in place before an incident of fraud is reported to effectively prevent such events. It is essential to identify the indicators during the underwriting process which will help to curb the fraud. It is essential to involve more information at the underwriting step to allow the insurer to make an informed decision. Ensure that you are analyzing the data corrected in the underwriting level mas this will help you identify some of the fraud indicators. Check on the background information of the client you are serving as this will allow you to deal with a genuine customer thus reducing the cases of fraud. Have an in-depth analysis of clients information when they are making the proposals and have each document analyze differently. Effective prevention of insurance fraud starts with the identification of the clients and verifying their details when they are buying the insurance services. Effective mechanism should be put in place to help in dealing with such attempts.
Viewing the situation in a fraud perspective, it is advisable for the insurer to analyze the First Notice of Loss as one of the management steps employed to prevent fraud. Streamlining the process, automation, improved workflow among others are some of the aspects that can aid the insurer to identify the fraud indicators before they affect the overall performance of the form. It is advisable for insurance firms to employ some of the warning systems which will help them note the fraud triggers such as the Voice analytics. Note that any delay in identifying the fraud triggers can cost the insurance firm a lot of cash in the long run.
The insurance firm should consider hiring professionals who are familiar with insurance fraud and they are good in investigating such occurrences.