Insurance investigators have
new database to fight fraud
Insurance company special investigative units, which combat fraud, now have a database
available to them that can help them take a bite out of insurance fraud, which carries an
estimated $20 billion-a-year price tag for property/casualty insurers.
The Insurance Services Office (ISO), an industry group that maintains claims databases,
has expanded its ability to research your prior insurance claims with the help of Alta
Analytics Inc., a technology firm based near Columbus, Ohio. If your insurance company
uses ISO's claims databases, it can add Alta Analytics's NetMap for Claims and
cross-reference millions of records in order to root out insurance cheats.
The system will cost insurance companies between $300,000 and $500,000 each to
implement initially. Annual fees will also cost insurers upwards of $300,000, depending on
the number of database users, number of offices that have access to the database, and type
of claims the insurer wants to search. Five insurers Prudential Property &
Casualty, Nationwide, Travelers, Progressive, and CNA currently use NetMap.
Chris Guidette, a spokesperson for the ISO, asserts that for every dollar your
insurance company invests in the NetMap system, it can expect an $80 savings. Overall,
Guidette estimates that $2 billion a year can be trimmed off the $20 billion price of
Eliminating the "brown-shoe method"
Herb Jones, Alta Analytic's chief executive officer, describes NetMap as a
"connect-the-dots" search tool, enabling claims representatives to uncover
consumer fraud that would not otherwise be spotted. For example, by matching minute
similarities in insurance claims (like a doctor's name or a phone number), the system can
find claims made by the same person even if they used an alias, another social security
number, or another address.
Guidette notes one case in which a woman made a claim on a $20,000 diamond ring she had
lost. The insurance company ran her name through the NetMap database and were satisfied
that she was making a legitimate claim. However, the insurance company claims adjuster
decided to search on the name of the woman's boyfriend and found that he had collected on
claims from six different insurance companies in the past two years for the same lost
"You get greater claims-handling speed and greater accuracy, too," says
Guidette. "Sometimes the little claims that are routine can turn out to be the tip of
the iceberg of fraud." The old "brown-shoe method" of investigating claims
"two people being locked in a room for two weeks who are drinking bad coffee
and eating stale pizza and sorting through huge amounts of paperwork" isn't
able to detect those tip-of-the-iceberg cases. Insurance companies believe the new
investigative tool can.