Social media data mining offers insurers an opportunity to combat fraud and improve underwriting, according to a recently issued white paper by QBE North America, an operating division of global insurer QBE Insurance Group Limited.
The white paper titled “Innovations in Using Social Media to Fight Insurance Fraud, Improve Service,” offers several examples of claimants publicly sharing facts of their lives on social media that contradict the basis of their claim, such as the semi-pro athlete playing well in local sports leagues while collecting workers’ compensation benefits.
Insurers are increasingly employing social media analysts to detect fraud.
“Finding new methods to fight fraud helps keep insurance premiums down for everyone,” said Dan Franzetti, chief claims officer, QBE North America. “Some studies suggest that as much as 10 percent of all property and casualty claims could have fraudulent elements, and leveraging the power of social media helps us more effectively and precisely identify instances of fraud to drive the cost out of the system.”
The white paper revealed the most recent and best service approaches place considerable emphasis on interconnectivity between online information platforms such as social media, traditional websites and public record databases. But with one billion new social media posts appearing every two days, the massive volume of social media content is also its biggest challenge. To cope with this flood of information, cutting-edge carriers are now deploying big data analytical tools.
“There is an increasing array of powerful tools to help make sense of all the data,” said Brian Wilson, VP, Special Investigations at QBE North America. “Text-mining software parses and analyzes unstructured text-based information. Social customer relationship management tools search millions of social media posts and platforms to find activity related to recent claims. Predictive modeling helps spot suspicious activities before fraudulent claims are paid. Social network analysis sifts through large amounts of data to uncover hidden relationships among people, places, locations, accounts or virtually any other type of entity. Lastly, the very best service providers have the ability to actively monitor for changes in the subject’s profile or internet activity, while assuring a high confidence level in the results by removing false positive findings.”
Besides detecting fraud, insurers are using some of the same information derived from social media to improve underwriting and offer better customer service. Some examples include:
- After a natural disaster, monitoring social media can help insurance companies identify the most affected areas and thus more quickly deploy loss mitigation and recovery resources.
- Similarly, social media information may reveal situations of increased risk and better enable insurance companies to suggest safety measures that could prevent loss.
- Finally, social media information can help the insurance company learn of developments that warrant updates in coverage, such as a home renovation project that requires builders’ risk insurance.
Source: QBE Insurance