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In fairness the refusal/inability of companies to honour financial obligations is not a problem unique to insurance companies. All organisations rightly focus more on generating revenue but some become reluctant when called upon to fulfil promises to their clients involving financial outlay.

I conducted an experiment recently involving my mobile phone provider. As my contract was nearing the end after a two-year period, I contacted them and as usual followed the steps as directed by the automated answering machine. Astonishingly, after waiting for 20 minutes to speak with a staff, I was disconnected. This happened twice so when I rang the third time, I went for the option that linked me to staff in the sales unit and was instantly connected to a staff. Of course when it became clear to the staff that I was not after a new contract I was transferred to the cancellation team and continued to wait.

Without exception all countries where insurance companies operate will have some unscrupulous operators who are no better than the ordinary con man on the street using dishonest methods to trick people into parting with money. Though I praised insurance companies in earlier posts, feedback I have received coupled with a few personal experiences have led me to accept that there are insurance companies operating today that the authorities need to monitor closely.

Even the so-called hub of insurance- London has its share of insurance companies that use specially trained staff backed by fancy TV advertisements and publications to persuade unsuspecting members of the public into parting with money in exchange for badly worded insurance contracts.

How To Spot Crooked Insurance Companies

Premium

We are all hungry for bargains and most are quick to run to comparison sites for quotes. These sites unfortunately rank quotes from insurance companies based on prices with the cheapest ranked topmost. As with most goods and services, the cheapest is not always the best. This is especially true for insurance because it involves pooling of funds with each insured expected to contribute to the pool, premium commensurate with the risk it presents.

So when the price (premium) appears too good to be true, please avoid. When an insurance company undercuts the competition by quoting ridiculously low premium, it follows that in the event of a claim, that company may not have sufficient fund to meet its obligation after making provision for overheads.

Reviews

A great advantage of the internet is that people are able to post reviews of goods and services detailing their experiences. Reviews are also available online for companies with the customers rating services of companies. Most of us already read reviews for most goods and services before purchase and should therefore extend this practice.

I usually troll the web for as much customer review of a company as possible as some of these companies with the aid of their IT staff attempt to counter the negative reviews by posting fake reviews.

Referrals

Akin to points highlighted about reviews above. The old-fashioned way of deciding whether to patronise a company offering a service is usually to ask for the opinion of friends and family. Often we extend the enquiry to professionals we have had dealings with and trust/value their advice.

Company Annual Report

For those comfortable with numbers, the traditional method of reviewing a company's standing is the annual report which is a comprehensive report of the company's activities for the preceding year.

With a few clicks these reports could be accessed on the web offering access to useful information like the balance sheet of the company, its profit and loss and cash flow statement as well as helpful notes to aid understanding of the financial statements.

Opting for legal cover extras

This is particularly useful when you need to pursue an uninsured loss. Insurers are more likely to honour a claim which falls within the purview of their policy if lodged through a solicitor because prolonging such claims cost them a lot more in legal fees if they eventually lose the case.

However if you find that you are no match for the might of insurance companies but must invest in insurance regardless, you may want to seek the services of an insurance broker.

The insurance industry strives a lot to win the trust of their customers. Imagine a scenario where the right ones are not rewarded and the wrong ones are rewarded. This leads to chaos or loss of faith in a system.

Now the question is 'what breaches the trust utmost'? In any business, it is the money that matters in return for the investment that the customer paid for a service or product. When it comes to insurance, customers expect a reward for the premium they paid. During risks/accidents/deaths they expect the reward from the insurer during the claims process. Because of this reason, claims processing is the most crucial stage for the insurers. It should be seen in the context that, not all those who claim are not genuine ones, but at the same time the genuine claims need to be rewarded. It is at this stage fraud analytics powered insurance processes comes to the aid of insurers.

Why is it Important to Detect Fraud?

According to FBI, about $45 billion is lost every year in insurance fraud. Handling claims is not a simple process. On the other, it is the most complex process in the insurance processes. Complexities include frequent file transfers, gathering adequate information, sieving misinformation from the right ones, etc. All these contribute to the complexities for the insurers. If the insurance carrier is unable to identify whether the claims are genuine or fraud, it is a foregone conclusion that the insurance carrier will undergo huge loss leading to a chain of losses to other sectors linked with it.

Today, customers are looking at quick and quality services. Customers may not like a scenario where more time is required to conduct background checks. Even if the insurers use the best communication to soothe their feeling, customers leaving a sad note or unimpressed, can send wrong feedback on the social media. To avoid all such instances, the answer lies in fraud analytics. Technically speaking with the help of analytics insurance carriers need to integrate data sourced from claims notes, telematics data, social media, OFAC (Office of Foreign Assets Control), weather data etc., inspectors can develop pattern recognition algorithms to speed up the claims process. While developing the algorithms, reliable high-quality data is identified and correctly integrated with all the meta-data labels. The process includes analyzing, filtering and segmenting by a computer-based system that analyses various risks.

Ultimately the bottom line is to provide nearly automatic clearance for simple, straightforward cases, and immediate expert attention on the complicated or suspected claims. Analytics also helps in streamlining the internal processes. This will result in saving the valuable time of the customers. If there is a possibility to reduce the waiting period of the customers with fraud analytics, they will hail this as a big success in the service area.

Thanks to analytics, today insurance executives are empowered to make informed decisions for strategizing, carving new niche markets, as well as building loyal customers. Fraud analytics is promising for insurance carriers as it has the capability to respond to the evolving insurance industry.

According to Coalition Against Insurance Fraud anti-fraud alliance, speaking for customers, fraud accounts for 5-10 percent of claims costs for insurers in U.S. and Canada. Nearly one-third of insurers (32 percent) agree fraud constitute to 20 percent of claims costs.

To Pursue Path to Profit Power Insurance Processes with Fraud Analytics

For insurance carriers, the main issue is to raise profits amidst tough competition. The facts and figures above mentioned states fraud constitute 20% of claim costs. Take the example of P&C industry to understand the impact of the loss. The insurance Information Institute says that the profit of P&C insurance industry income analysis, from 2010-2014 is $55.5 billion. If 20% can be added as profits through fraud analytics, it will immensely help the industry to contribute to the GDP of the nation benefitting all stakeholders. Therefore insurance carriers who are pursuing to install trust in their customers must power insurance processes with fraud analytics.