The Coalition Against Insurance Fraud and Shift Technology released new research Wednesday detailing the rapid adoption of artificial intelligence (A.I.) tools by the insurance industry to fight fraud. A majority of surveyed insurers (56%) say they’re using A.I. as part of their anti-fraud arsenal. The two organizations hosted a panel of experts for a virtual discussion exploring the implications this massive technological shift will have on regulators, consumers, and insurers.
The Coalition and its members want to be on the bleeding edge of this emerging technology, according to Coalition Executive Director Matthew Smith.
"Our research shows that A.I. is now a mainstream technology applied to the fight against insurance fraud," Smith said. “While we are open to the possibilities of this new technology, the Coalition will be thought leaders in this space pushing for fair and ethical use of these immense data sets and powerful A.I. products. It’s in everyone’s best interest to fight for tech solutions that stop scammers without entangling policyholders with legitimate claims.”
Invest in the future or get left in the past
In a survey of leading property-casualty insurers, researchers confirmed the industry is moving decisively toward A.I. adoption with 95% of insurers saying they are using anti-fraud tech and nearly 60% already using A.I. as part of their fraud-fighting arsenal.
Roughly half of the industry expects to ramp up its investment in anti-fraud A.I. within 12 months. Nearly 75% of respondents believe that among relevant technology, A.I. will have the greatest impact on claims and fraud detection over the next five years.
Big data is king
Insurance companies are using large public data sources (67%); social media (78%); video (40%); and unstructured data such as adjuster notes and police reports (63%) to feed their algorithms. Panelists at the virtual event warned that consumers, regulators, and watchdog groups should pay close attention to the data sources insurers are using as well as the application of those procured public and private data sets.
A key advantage of A.I. is the ability to analyze huge amounts of data — especially unstructured data like images and scanned documents — at scale. But there are legitimate concerns that “garbage in garbage out” data sets and models will cause an unnecessary spike in false flags on legitimate claims. More specifically, nearly 40% of insurers said they are concerned about model bias in emerging A.I. products disproportionately impacting low-income policyholders and people of color.
Get caught up
Visit InsuranceFraud.org to read the full A.I. study. And be sure to watch the full recording of “All in on A.I.?” featuring:
Armand Glick, Fraud Director, Utah Department of Insurance
David Rioux, Coalition Research Committee Member, Erie Insurance Company
Dan Donovan, Head of Customer Success, Shift Technology
Peter Kochenburger, NAIC Consumer Representative, UConn School of Law
Matthew J. Smith, Executive Director, Coalition Against Insurance Fraud
The Coalition thanks its Research Committee members and Shift Technology for all of the work put into this groundbreaking research project. These collaborative efforts are the essence of the Coalition’s mission to leverage the combined energy and resources of consumers, government organizations and insurers in order to combat all forms of insurance fraud; reduce costs for consumers and insurers; and promote fairness and integrity in the insurance system.
Coalition Against Insurance Fraud
The Coalition Against Insurance Fraud is Americas only anti-fraud alliance speaking for consumers, insurance companies, government agencies and others.