Improving consumer experience requires greater control against fraud
Investing in learning about how to protect yourself from fraud and in techniques to discover and avoid them is one of the priorities of insurers
by Denise Bueno
Below, the article published in InfoMoney.
Controlling fraud in companies is an arduous task. In insurance, the topic has been the subject of constant debate, given the sector’s effort to make insurance sales simple and agile through applications. This causes the process of contracting insurance to eliminate some requirements, which may open loopholes for fraudsters.
Digital banks, for example, went through a serious crisis at the beginning of their operations, with fraudsters taking advantage of the facilities for opening accounts to create an “orange” that made illegal operations possible. The topic was dealt with rigorously by the Central Bank and circumvented with investments in embedded technology to contain loopholes found by fraudsters.
In insurance, the routine is the same. Insurers face two important and antagonistic points. The sale is virtual, which expands the capillarity to win customers – but the fraudster also benefits: now he makes virtual victims. On the other hand, insurers rely on advanced artificial intelligence programs, with a significant volume of data, which makes it easier to detect patterns outside the curve.
“Not that it was easy when the sales process was all done analogically, with paper contracts. But selling online expands the fraudster’s activities to locations that he could not reach before,” says Marcia Takakura, Vice President of Legal & Compliance at Ezze Seguros.
Historically, there is an emblematic number: approximately 20% of what is paid in insurance claims worldwide is fraud. Insurance-related fraud in Latin America results in annual losses of approximately US$50 billion, with Argentina being the country with the highest incidence. According to Fides (Inter-American Federation of Companies and Insurance), about 45% of hiring in our neighboring country is irregular.
In 2022, according to a survey by CNseg, suspicious claims for compensation totaled 12% of the BRL 25.7 billion paid to customers. And, of these R$460 million, only 15% were effectively proven to be fraud. “Little has been proven, as they are low-value values and would not justify the high research costs”. says Marcia.
But now, with the facilities to have a quick sale, the insurers’ conclusion is that tightening the fence has become a priority. “If fraudsters notice a breach, word quickly spreads among them. The consequences for insurers and society are disastrous,” says Marcia.
Two emblematic examples of targets for fraudsters in the sector are DPVAT insurance, which is currently managed by the government, and health insurance, with a shortage of offers in individual insurance.
Per year, it is estimated that the market has an impact of BRL 28 billion with fraud and waste, as pointed out by the Institute of Supplementary Health Studies (IESS). But this scenario, already critical, intensified during the pandemic. As a result, in recent months, several companies have fired employees for defrauding the health plan. Family plans, packaged with a “business” label, also took a hit. Beneficiaries received letters canceling the plan from health operators, alleging excessive use, which raised a certain panic among consumers.
The backdrop for this is robots, which are getting smarter every day and detect suspicious data patterns, such as a customer having four reimbursement requests for a single visit or a patient who has never shown signs of precarious health having eight visits a year in a dermatology office with a history of botox applications, without ever having taken advantage of the discounts on medications offered in the plan’s benefit club.
Some insurance niches are better controlled, such as large risks, with tailor-made contracts and which already have a better-developed degree of corporate governance. This greatly helped the growth of insurance such as the transport of goods, for example. The “Achilles heel” of the sector worldwide continues to be mass insurance. Cars, life, small businesses, rural, cell phones, electronic equipment and, more recently, financial transactions such as Pix, are increasingly in the sights of insurers, which, according to experts, has helped to reduce fraud.
The commercial and underwriting directorates, previously in conflicting relationships, are aligned with the increase in fraud. The first wants to sell and, for that, wants everything to be facilitated. No asking for a health declaration, which interferes with the customer experience. Documents