The Surprising Key to Safe Digital Transformation for Insurers

Digital transformation is now business-as-usual in 2020, but many insurance carriers are late to the game—often because digital services expose them to new and complex types of fraud. Yet, as consumers expect to be able to purchase insurance online, file claims digitally, and receive payments quickly, insurers are eager to offer these services—if they can do so safely.

Leading insurers are already investing in new capabilities. A Kount report finds that many providers plan to expand their product offerings, prioritizing mobile and online services to improve the customer experience. In fact, 44% of insurers plan to invest in mobile claims documentation within the next year, and 42% plan on enabling mobile claims submissions.

Insurers Need to Address Both Digital Innovation and Fraud Concerns

Insurers are making these investments to create a better customer experience. However, new digital channels are also prime targets for digital fraud: one industry report finds that digital fraud is rapidly increasing in the insurance industry at a rate of 21% per year, with the cost of fraud expected to reach $12B by 2026. Insurance fraud takes on many forms, with first-party fraud (also called “friendly fraud”) as the top concern for more than a third of insurers.

How the Spectrum of Identity Trust Can Stop Bad Actors and Accelerate Marketing

Identity trust offers effective fraud prevention and digital identity verification across a spectrum. At one end, it enables insurers to stop illegitimate policies, identity assumptions, bot quotes, and ghost brokering. On the other, insurers can generate revenue more efficiently by improving lead qualification and identification, campaign targeting and conversion, and identifying buying propensity.

Kount Blocks the Most Common Types of Insurance Fraud

To help insurance providers respond to increased levels of digital fraud, Kount launched an Insurance Digital Risk and Fraud Prevention Solution that uses adaptive AI and the Identity Trust Global Network to establish risk or trust in real time throughout the insurance customer lifecycle. Kount’s team worked with some of the largest insurance providers to develop protection against the main insurance fraud tactics while also enhancing marketing capabilities.

Kount’s solution is particularly adept at addressing the most common types of insurance fraud, including bot quotes—when bots submit illegitimate bulk quotes to open fake policies by using consumer information purchased or stolen from lead-generators or brokers’ books. Carrier data requirements make bot quotes costly to process, and Kount’s AI-driven solution detects automated behavior and prevents the quotes from being submitted.

Kount Improves Marketing and Underwriting with Identity Trust Data

In addition to sophisticated fraud prevention, Kount provides the industry-first ability to use digital identity verification to enrich and accelerate marketing efforts by establishing trust in real time. This helps insurance companies identify visitors, manage leads, and determine who is shopping for a quote to quickly segment high-value or high-risk leads. With this data, insurers can optimize marketing and sales efforts, personalize customer experiences, and reduce the time spent vetting prospects.

“One of the largest national insurance companies we work with has seen a 10x return on investment in working with Kount for fraud prevention,” said Vik Dhawan, vice president of product at Kount. “Kount’s fraud protection platform increases profitability and reduces fraudulent claims with digital identity verification and advanced artificial intelligence. These capabilities help businesses accelerate claims processing, improve underwriting accuracy, and deliver a frictionless customer journey.”

Using Adaptive AI and a Global Data Network to Prevent Fraud

Aite Report
Fighting Evolving P&C Insurance Fraud.

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Emerging tools and technologies that can be effective in the fight against these new schemes (as well as more traditional schemes) are data-based and help identify potential fraud during the underwriting and claims processes,” writes Jay Sarzen, senior analyst at Aite Group in a new report, Fighting Evolving P&C Insurance Fraud. “The most effective of these solutions have an artificial intelligence (AI) component.”

Kount addresses both data and AI needs with the Identity Trust Global Network and Adaptive AI. Kount’s Identity Trust Global Platform is the largest data network of trust and fraud-related signals networked by AI to uncover the true level of trust behind interactions. With the ability to link signals from payments data, location ID data, digital identifier data, and unique customer data, carriers can immediately detect and reduce fraud across their services.

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