INTERVIEW
Expert view: AI and the detection of insurance claim fraud NZSM sits down with Cara Carpenter, National Case Manager at ISACORP Corporate & Insurance Risk Solutions, to gain insights into the double-edged implications of emerging technologies for insurance fraud. NZSM: Insurance companies are moving full steam towards automated customer experience, this means moving from paper to digitised processes, real-time claims processing and generally greater use of technology. What are the risks in terms of claim fraud?
Cara Carpenter is National Case Manager for ISACORP Limited. An intuitive professional with multisector experience in financial fraud, customs and coronial investigations, she holds a Bachelor of Criminology and Criminal Justice.
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CC: It is already noted in the USA that there has been an increase in insurance fraud since 2014, which coincides with the surge in insurance tech popularity. With automated processing, claim fraud can begin at the inception of the policy, as the information given is driven by the customer. Risk comes into it when this is automated and contained within standard parameters but without the ability to question or determine other relevant factors for risk and premium profiles.
An example is vehicle purchasing from a car yard. Registration, ownership, financial and insurance needs are automated and initially determined by ‘honest Joe’ the car salesman. Either no or bogus information and (intentional or not) lax fact checking, followed by three months of payments for legitimacy, and then a claim for a stolen vehicle in South Auckland. The fraudster is laughing all the way to his bank app. Money laundered or drug debt paid by vehicle or goods are services offered by local narcotics providers. The insurer may have little avenue to explore or recoup losses when the legitimacy of the client is not initially screened by insurance professionals. Automated claim processes look for flags inside or outside set parameters or
February / March 2020
