Legitimate customers are paying higher premiums to cover fraud losses.
In the United States, up to 10% of all insurance payouts are due to fraudulent claims resulting in more than 80 billion dollars a year.
Insurance fraud has only grown more prevalent as claim-filing becomes more digital.
Insurance companies process so many claims nowadays that it has become impossible for human analysts to properly inspect each one, but the costs of not flagging fraud are also high. Many are therefore leveraging AI to automate the inspection process and reserve humans for claims the AI has flagged as suspicious.
AI-driven tools can pick out warning signs among thousands of claims in a fraction of the time it would take human analysts to do so.
Allstate’s investigative AI unit also detects new fraud methods that neither they nor human teams have seen before.
Allstate’s SIU is currently in charge of this task, but the sheer number of fraud techniques means an approach relying entirely on their expertise and intuition may not be viable in the future.