Article by Wojciech Wolny
Director of Consulting Services

Perfect Fraud Ring

 

It is estimated that organized crime groups are responsible for 12-14% of all fraudulent claims. Here is an example of one of them, which for many insurance companies, would represent a fraud ring that would never be found.

 
 
 
 

Notification dates also create a very strange pattern. The insurance company was notified about accidents in the following order:
- Claim for the truck in the November 15 accident was filed eight days after the accident (23rd of November)
- Claim for the truck in the November 5th accident was filed 24 days after the accident (29th of Nov’16)
- Claim for the trailer in the November 5th accident was filed 100 days after the accident (13 of February of the following year)

 
 
 
 

As a result the insurance company had no way to connect those three accidents. The two truck claims ware settled almost 2 months before the insurance company was notified about the trailer involvement (which closed the ring and changed the understanding of of whole situation).

As a result of this delay, a different Loss Adjustor was assigned to investigate the November 5th trailer claim and had no chance to connect the dots. Even if, by chance, the same Loss Adjustor would have received this claim, it is very unlikely she would remember the previous accidents and spot the scheme. Even if she did so, money was already paid for the two truck claims.

 
 
 
 

Another interesting thing here: both trucks ware repaired at the same garage…..and 11 out of 48 claims with this garage were marked as suspicious but never proved as fraud. This is four times higher than market average and certainly merits further investigation.

These type of criminal schemes are not easy to spot using regular analytics and alerting business rules. However, these can be easily detected and analyzed using DataWalk with its unique cluster identification capabilities. In this case, DataWalk would have made it easy to spot this ring when the final claim was investigated, such that the risk of further fraudulent payments to this ring could be reduced.

 
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