How Do Insurance Companies Detect Fraud?
Fraud of any kind involves intentional deception or misrepresentation on a benefit or claim. There are several different methods companies can use to detect abuse or fraud, especially if the fraud shows common trends or patterns.TypesThere are two different types of fraudulent claims. The first is a seemingly legitimate claim, where services were rendered, but the claim has been exaggerated in price. The second form of fraud is turning in a claim for services that were never performed.IdentificationOne step in detecting fraud involves identifying any suspicious claims. Claims with a higher potential for fraudulent activity are found by computerized statistical analysis or by referrals from claims adjusters or insurance agents.SupervisedThere are two main types of statistical analysis tools used in detecting insurance fraud. The first is the supervised method, which consists of looking for expected values of previous of non-fraudulent claims, as well as prior fraudulent claims that rais
