We take a look at how FRISS uses AI and how the company is focused on automated fraud and risk detection for P&C insurance companies worldwide
FRISS was founded in 2006 with the goal of making insurance more honest by catching fraudsters before they affect customers.
The company’s technology provides end-to-end assistance throughout the policy lifecycle and is solely focused on automated fraud and risk detection for P&C insurance firms around the world. AI, text mining, image analytics, geolocation, predictive models, internal and external data sources, and expert knowledge rules are used to power their solutions for underwriting, claims, and special investigations.
According to FRISS, it saved the insurance industry over US$1 billion in fraudulent claims averted or not paid out last year, thanks to its consumers.
Digital transformation has led to more complex security
Since the company’s founding, demand for anti-fraud solutions has expanded, and it now has over 200 installations in over 40 countries, with offices in Chicago, Santiago, Paris, Cologne, and Utrecht.
The challenges and opportunities facing insurers in their attempts to combat fraud across the policy lifecycle are underlined in a recent report by FRISS. Over 400 insurance professionals from around the world contributed to the survey, which covers subjects like fraud schemes, data difficulties, process automation, and more.
The challenges and benefits of fraud detection software solutions are viewed differently by survey respondents. The data difficulty is a recurring topic, from underwriting to claims to special investigations. The challenge is capturing real-time data in order to respond swiftly when fraud is suspected. According to previous FRISS biennial surveys, insurance professionals have struggled with insufficient data — either low-quality internal data or limited access to external data sources.
COVID-19 will have a long-term influence on insurance, owing to the pandemic’s hastening of digital processes. To reduce the danger of fraud and improve protection, insurers employ a multilayered approach. While these trends are likely to continue, insurers are better positioned to use digital technologies to combat fraud from beginning to end.
Exploiting gaps in insurance systems
Fraudsters continue to target insurers and attempt to exploit new system flaws, driving increasing insurance premiums for consumers. Keeping up with current criminals was the greatest problem for 41% of survey respondents in efficiently reacting to fraud. Claim bogus injuries, nondisclosure of key information, and staged accidents are the top fraud techniques that have grown in popularity in the last year.
Fraud accounts for around 10% of total claims costs, according to the industry. However, there has been an increase in the percentage of claims suspected of being fraudulent since the previous survey. In 2021, the percentage of claims suspected of including a potential element of misrepresentation or fraud increased to 20%, as projected by FRISS in the previous study.