How Technology Can Create More Efficient Fraud Detection in Life Insurance

It's no secret that fraud is an ongoing issue in the life insurance space, and that the tech age has provided bad actors with new avenues to find vulnerabilities and blind spots in detection and security protocols. 

However, letting fear of fraud prevent your organization from modernizing means missing out on opportunities to grow revenues and reduce costs. Moreover, a sophisticated tech infrastructure can actually be leveraged to help prevent and root out fraud. Here are a few examples:

Digital Identity Verification

Digitizing your operation allows for the introduction of stronger identity verification protocols. This can be as simple as a multi-step process in which applicants or claimants verify their own identity, or as robust as real-time verification of a user’s digital footprint and identity through internal or third-party software on the back end. Either way, it’s faster, more accurate, and an important safeguard against  fraud.

Data Analytics and Machine Learning

New tech allows machine learning algorithms to analyze vast amounts of data extremely quickly. It can then begin identifying patterns and anomalies, and drawing connections to help flag suspicious results for investigation. The system can also score applicants or claimants, ranking them by likelihood of fraud. Not only does this save time and money by automating what has traditionally been an exhaustive human process, but it may also help reduce instances of bias or error.

Data Sharing and Collaboration

It’s important to note that data tools help people, they don’t replace them. On the front end, these tools can save valuable time and money, and create systematized, highly actionable data packets. This arms in-house fraud detection teams with what they need to collaborate with other internal teams, outside investigators like law enforcement, or even other insurance carriers. 

As bad actors become more sophisticated, it’s important to have the technology infrastructure in place to combat them more effectively. That’s just one of the reasons that carriers shouldn't let fraud fears stymie their efforts to modernize and integrate new technology. At the end of the day, it’s about getting more efficient and protecting the bottom line.