With the cost of insurance fraud estimated to be a staggering $80 to $120 billion annually, insurance companies cannot afford to take an arbitrary approach in their overall fraud deterrence strategy.
According to a recent article in Property Casualty 360°, taking a closer look at the special investigations unit (SIU) is a proven strategy for effective fraud management. Three key objectives in SIU management are outlined below.
1. Know Ideal Roles for SIU Personnel
Knowing the skill set of SIU team members is often the best way to ensure that employees are up to the task of contributing to overall strategic implementation. Traditionally, investigators and insurance/business professionals make up the SIU industry, but each have separate strengths they can bring to the table.
Investigators with law-enforcement or investigative backgrounds are generally well suited to the front lines. They typically understand the dynamics of fraud, can manage efficient investigations, and possess the critical interview skills that can lead to confessions. On the other hand, business-minded professionals can be effective in supervisory positions to triage cases, help analyze and assess, and make innovative data-driven decision to support your strategy.
2. Develop the SIU Departmental Strategy
Even though industry benchmarks can be a source in the design and operation of the SIU, the effects of insurance fraud are not universal due to differences in insurance companies’ products and applications/claims processes. Therefore, the most critical point in an SIU’s fraud strategy should involve data collection and analysis.
Data collection includes information like the number of investigators that are needed, how many cases they get, which cases are assigned, what technology is being used, as well as spending and budgets. The data analysis can then determine if the right measurement systems are in place, and whether SIU metrics are being analyzed in a way that best adjusts to the company’s overall fraud strategy and efforts to maximize return on investment.
3. Capitalize on the SIU’s Power of Deterrence
Deterrence is a potent weapon in fighting fraud, but because many insurers are focused on projecting an image of simplicity and speed in the claims process, consumers may think companies are ignoring what is going on behind the scenes. Insurers are advised to balance the message that they are nabbing scammers while not appearing to deny claims unreasonably.
The article suggests that insurers create a dedicated webpage on the corporate website devoted to SIU efforts, starting with a description of what the SIU is and does. Special Investigation Unit success stories, including news of campaigns with state and national law-enforcement agencies, can demonstrate how SIU actions are helping to minimize increases in customers’ insurance premiums.
The goal is to communicate to the marketplace that there is a vetting process, that fraudsters are not getting away with their crimes, and that the company is trying to protect customers.