Leveraging Social Media Research in the Claims Investigation Process Helps Fight Fraud, Mitigate Risk, and Reduce Cost

False insurance claims cost American consumers $80 billion annually, with fraudulent cases reaching an all-time high. The staggering cost of investigating claims not only leads to higher premiums - it also has a costly impact on insurers attempting to deal with valid claims efficiently.

Fraud is as old as insurance itself. But with the rise of digitalization, the sophistication of fraudsters has also evolved. In the wake of COVID-19, insurance companies have been faced with increased counterfeit insurance claims, including collusion claims, double claiming, and phantom claims, according to Forbes : "Some industry professionals believe the number of claims with some element of fraud has nearly doubled since the COVID-19 pandemic."

Respondents in the FRISS Insurance Fraud Report 2020: The Impacts Of COVID-19 On AI And Digitalization In Insurance believe that 18% of all claims contain some element of fraud, inflation, or misrepresented value.

The good news is that while insurance fraud has increased, so has the use of social media to research claims investigations. If your job is investigating insurance fraud, that's good news for you. For example, if you can determine that a car accident claim has been issued from a so-called holiday destination, while an Instagram status update reveals the claimant was at a local event, you have a powerful piece of evidence.

The rise of new camera technologies opens additional possibilities for obtaining evidence of fraudulent behavior. Footage captured by GoPro and similar camera technology shared on social media profiles makes it possible to see what happened at the time of the accident. This can reveal, for example, that claimants were not at the locations they claimed to be or that claimed damage was not as severe as reported.

Social Media Background Data: A Game Changer

Social media background analysis is a growing priority in the modedigital age. An individual's social media history can provide great context for their behavior and actions across the online world and beyond. This information can uncover malicious activities and expedite investigations.

Social media intelligence offers profound user insights. For example, if an employee submits an insurance claim for a back injury, employers may invalidate the process if they uncover conflicting social media information, like Instagram photos of the same employee engaged in outdoor sporting activities.

Additionally, social media screening can gain valuable insights from secondary leads, such as popular contacts of a suspected fraudster. For instance, an injured claimant might appear in a post-marathon photo posted by a close connection.

Accurate Intelligence in Social Media Data Analytics

Social Discovery provides reliable, actionable data to clients, earning the trust of leading insurance organizations that enables deep insights for standard claim verifications. With an integrated add-on in the Guidewire Marketplace, Social Discovery gives adjusters an optimized user experience, including simplified workflow, access to real-time information, and single sign-on. Using this innovation to access intelligence has greatly reduced the time and cost of administrative processes with each claim.

Data experts at Social Discovery have collaborated with some of the biggest names in the insurance industry. And Social Discovery is the sole provider of social media reporting for the world's largest third-party administrator. The company's analysts provide a unique approach to social media reporting through a hybrid concept known as "accurate intelligence," which combines the accuracy of advanced AI algorithms with on-the-ground knowledge and contextual interpretation of human experts to provide relevant data every time. As such, the technology's revolutionary method avoids false positives that interfere with the success of your operations.

Social Discovery's dedicated analysts are always ready to support your company with the data-backed customized solutions you need to fill the gaps in your policy management processes. Each solution delivers measurable results through customer satisfaction scores and ROI, supplying accurate data that helps streamline the claims investigation process.

Why Social Media Data is Powerful - and How You Can Harness It

Data from social platforms such as Twitter, Instagram, and Meta (formerly known as Facebook) may shed light on illicit activities. Extracting relevant data can be time-consuming and laborious work for investigators, whose time could be better spent on reviewing claims and other client-facing interactions. Most insurance companies do not have the necessary tools or developed skill sets to sift through mountains of online information to expertly extract the most salient points. As a result, adjusters and Special Investigations Unit (SIU) teams that lack actionable and reliable social media data may miss valuable information about fraud activities.

Here are a few examples of how social media data can be leveraged to uncover fraudulent insurance-related activities:

Personal injury claims: In these scenarios, individuals claim a specific injury that results in lasting bodily or mental harm. However, a quick search on social media might reveal the falsity of the claimed injury, such as metadata of images that show the individual hiking a mountain or participating in a race.

Medical malpractice: These situations involve fraudulent medical insurance claims such as permanent disability for a child through an early childhood diagnosis. However, the individual may have fully recovered and is now living an able, healthy life. Accurate social media intelligence can help retrieve online chat logs between the child's parent and other accomplices in the cover-up, thereby uncovering the fraud.

Worker's compensation: Social media background analysts can help identify employees who misreport a workplace accident that caused injury or loss of income. For example, analysts may discover that an individual who claims complete physical disability resulting from a workplace accident is actively offering services as a judo instructor.

Why Traditional Claims Verifications Sometimes Don't Suffice

Claims processing is a critical aspect of insurance operations. It also accounts for high costs of insurance processing and carries a heavy financial impact on the company. Slight improvements in claims management can result in a significant increase in profit margins.

Unfortunately, many claims managers face a host of challenges that bog down the verification process. For example, managers may spend a great deal of time and effort compiling and sorting through multiple data sources, including information from third-party agencies. The tediously consolidated result could lead to even more questions, claims complications, and dead ends.

In addition, some claims managers may lack the tools and experience to categorize and prioritize collated user data. Data categorization plays a crucial role in justifying claims and driving cost savings. The manual categorization of claimant information can lead to inconsistencies, inaccuracies, and duplications, thereby hampering verification.

Finally, perhaps the root cause of ineffective claims processing is the continuous use of legacy systems. The lack of large-scale infrastructure investments leads insurance companies to stick with legacy systems that are less flexible, making it increasingly challenging to process claimant data in the rapid-paced digital world.

Key Takeaways

Social media investigations can be a valuable tool in virtually any claims investigation process, including workers' comp, auto accidents, property damage, and even organized insurance crime.

As a leading provider of social media background reporting, Social Discovery is helping SIU departments, claims adjusters, risk managers, and insurers gain access to the data they need to improve their claims review process.

To leamore about how Social Discovery can help you in your claims investigation process, visit our website and review the Guidewire and Social Discovery webinar, "Claim Fraud - Trends and Triumphs."

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Guidewire Software Inc. published this content on 15 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2022 22:15:14 UTC.