September 20, 2018
Five Insurance Fraud Prevention Trends for 2017
Posted March 24, 2017
In the insurance industry, increased competition, an uncertain regulatory environment, pricing pressures and disruptive new technologies will accelerate the race for new efficiencies and innovations.
But, those same innovations open up new avenues for cybercriminals to commit the kind of fraud that can seriously damage brand reputation and have a lasting impact on revenue and market share.
How will all of this impact fraud prevention in the insurance industry? Let’s take a look at five trends we expect to take root in 2017:
1. Digital Demand—and Danger
In 2017, Millennials and other generations will continue to adopt mobile and online channels as a way to shop and service their policies.
But it will come with risks—including an explosion in fraudulent claims that, by some estimates, has reached $250 billion per year.
Many brands will struggle to attain the agility to harness the promise of web-enabled processes while mitigating its downsides, including fraudulent policies and data breaches.
2. Business Model Disruption
As established brands rush to modernize their technological infrastructure, InsurTech companies will seek to disrupt them with the promise of faster, better service that keeps pace with the demands of today’s digital consumer.
Many insurers will leverage brand equity and reach while making sizable technology investments to outmaneuver these competitors.
3. Now is the New ‘New’
Waiting for anything—insurance quotes, policy approvals or claims processing—will become increasingly unacceptable.
As a result, insurers will pursue real-time authentication capabilities across all digital channels to accelerate the customer experience for legitimate users while identifying and thwarting fraud.
This will have tremendous benefits to brands that embrace this balance between user friction and fraud, and peril for those that don’t.
4. 360-Degree Fraud Defense
Increasingly, authentication won’t just focus on prospects and customers. To prevent data breaches, insurers will apply real-time authentication to everyone logging into its portals throughout the extended ecosystem—including brokers and agents.
Obviously this doesn’t impact the customer experience, but the extra protection from breaches and other forms of fraud will work in insurers’ favor.
5. Competing Integration Needs
Constituents throughout the organization will compete for priority in calibrating the balance of friction vs. fraud achieved through digital channels.
Marketing will seek to improve Net Promoter Score® through enhanced convenience, of course.
But there are, alas, other parties involved. Operations will drive efforts to improve customer service across channels. Claims will place a premium on real-time claims intelligence vs. retroactive analysis to reduce loss from fraud. And IT will be challenged to balance seamless, real-time service with the risks to brand reputation from fraud and data breaches.
The net-net? Marketers, at least, should embrace this tension and recognize fraud prevention is now key to generating and maintaining brand traction in the marketplace.
After all, the fastest, coolest new offerings and interfaces in the industry won’t do a lick of good if fraudsters use them to decimate your brand.