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The chance to obtain cash dishonestly from the UK's well-established insurance industry is continuing to prove a tempting prospect for too many fraudsters: according to the Insurance Fraud Bureau (IFB), in 2011, insurers uncovered 139,000 dishonest claims worth almost £1 billion. False claims in the motor vehicle industry were worth £541 million, making it the most expensive segment to the insurance industry, followed by false home insurance claims which cost £106 million.

Despite investment in anti-fraud systems and increased efforts to improve the identification and prevention of cross-industry fraud, the IFB estimates that a massive £2.1bn goes undetected each year. This staggering level of ongoing deception adds an estimated £50 additional cost per year to every premium, making it not just a problem for the industry but also a substantial financial burden on honest insurance customers.

And at a time when many householders are hard-pressed for ready cash, it's not just criminals that are responsible for insurance fraud; in many cases opportunistic policy holders are also adding to the problem by inventing or exaggerating claims in the hopes of generating a quick payout.

THE BURDEN OF PROOF
Document capture and electronic data management can go a long way in the fight against fraud, particularly in its potential to speed-up claims handling and give insurers more time to identify and investigate questionable claims.

By utilising a capture solution to convert claims correspondence electronically as soon as it enters the business, the data can be delivered instantly to the correct work stream, which cuts down waiting time and makes the whole process much quicker. Similarly, by automating paper-based processes, employees can store, retrieve and share new claims files and add on-going updates more effectively.

This faster, more efficient way of operating can also prevent delays in handling questionable claims, many of which are still being processed so slowly that, rather than being investigated, they end up being settled so that the insurer does not fall foul of regulatory requirements.

Good document management capabilities can also significantly reduce the likelihood that essential data or documentation is lost or mislaid which could lead to false claims being missed. Overall, dealing with claims more efficiently can also help lower the insurers' combined loss number.

Whether a claim turns out to be fraudulent or not, to avoid possible litigation occurring in instances where claims are disputed it's also important for the insurer to have an accurate timeline that shows when and how things happened in the process, as well as help to substantiate that the process was handled in a consistent manner.

The fact that carriers have the burden of proof in this process means that, if they can't show the appropriate controls are in place, the insurer could end-up paying out because of a lack of audit trail.

BETTER CUSTOMER EXPERIENCE
As well as serving insurers in the ongoing battle against fraud, the potential to use electronic document capture and management to achieve faster customer response times also presents the important opportunity to maintain levels of customer retention.

Working with up-to-date, transparent and accurate information benefits claim handlers by ensuring that they have all the correct and relevant data to hand when dealing with all types of cases - suspect or otherwise. In turn, the customer experience becomes faster and more responsive, as well as enabling legitimate claims to be paid out more quickly.

With the need to combat fraud now on the agenda of every insurance provider, missing out on the chance to ramp up vigilance because of poor operational practices could already be putting some firms at a competitive disadvantage. Other important potential benefits of document capture and management technology include grasping the opportunity to satisfy compliance, governance and legislative demands, in addition to achieving important productivity gains.

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