Digitizing Claims

What insurers can do to help prevent identity fraud

March 26, 2021 Photo

Insurers have been working for years to digitize their claims processes. The goals and benefits are critical and measurable: improve the customer experience, expedite claims settlements, and dramatically simplify the claims process, reducing unnecessary touches for insurers.  

Then, along came the COVID-19 pandemic. Digital auto claims processing went from 15% of all claims to more than 60% – almost overnight. Insurance carriers shifted their operations to accommodate claims staff working from home and customers who needed to socially distance. With an environment that required everything to go virtual, along with the rush to digitize claims (and payments, for that matter), insurers needed to build a digital virtual claim process that was not only easy to use but scalable and secure to meet increased customer demand. Adding robust digital security solutions allow carriers to more quickly process claims from verified parties while adding appropriate review processes for high-risk claims.

Suddenly, carriers had to go above and beyond to provide coverage and competitive rates, while delivering a seamless and secure customer experience. Carriers needed to provide the same attention and personalized service virtually that customers have come to expect when speaking with an agent or adjuster in person. However, with a growing amount of virtual claims handling during the pandemic, this work required carriers to enhance their identity management systems and security processes. And, while fraud has always been a concern in the claims process, virtual claims handling provides new avenues for fraudsters. Insurers must stay vigilant, particularly regarding identity fraud.

Identity Access Management

Identity Access Management (IAM) systems help verify and authenticate customer data as well as manage risk and elevate the customer experience. Crucial to digital claims, IAM provides customers with access to the resources they need to report and process a claim electronically with confidence. This, in turn, helps insurers minimize their risk while complying with privacy regulations.

IAM brings digital identity intelligence to life, helping carriers elevate fraud and identification decisions from a device to a user level, while marrying offline behavior and online intelligence. The technology is able to bring together the myriad of information an individual creates through online transactions, then develop a unique digital identifier for that individual―allowing the insurer to recognize good, returning customers while reducing claims fraud.

Effective IAM solutions enable real-time identity management and identity security, while delivering seamless and secure experiences anywhere in the online insurance lifecycle. The ability to track and manage the process also gives insurers deep customer insights, enabling a better customer experience plan.

There are two core security technologies required for insurers to build a successful digital claims network which meets the needs of their customers while keeping them secure.

Verification and Authentication

There’s no single method or technique to solve identity fraud problems. To process a claim safely and securely, the carrier needs to carefully verify the claimant and the devices they’re using to understand with confidence that they are who they say they are.

Verification solutions confirm essential personal information such as name, address, date of birth, or social security number. They use billions of records and thousands of independent data sources to quickly provide valuable information on the identity of the claimant. Identity verification allows carriers to better manage identity-related expenses, make more informed workflow management decisions, and ensure application accuracy.

Digital claims are already dramatically increasing interaction points a customer has with their carrier. Whether a claim comes from a laptop, cell phone, or tablet, insurers must be able to support their customer’s device of choice without risking security that can lead to fraud and a loss of customers. Authentication can verify a claimant is who they claim to be. And, while multi-layered and risk-based identity and authentication solutions can differentiate a trusted customer from an online thief, insurers need to keep the process as frictionless as possible for the customer.

To expedite handling, it is critical to assess the risk of fraud early in the process. For example, if a claim originates in a foreign country, it could be a higher risk. Or, if the device the claim has come from has been breached in the past, it likely warrants a closer look.

One especially powerful solution is to bind a device to the customer. When a policy is purchased, the insurer can use multi-factor authentication to bind the customer’s identity to the specific device. When a claim is made, the insurer can be confident in who the actual person is making the claim. Even with a customer’s identity successfully verified and authenticated, the insurer still needs to confirm their identity for future claims. Authentication solutions can leverage the combination of identity intelligence, advanced analytics, and intuitive technology to accelerate identity authentication across multiple transactional channels. An integrated collection of authentication tools gives insurers the proper level of authentication based on the risk presented by each individual.

We can all agree that the COVID-19 pandemic has changed the way most of us live our lives and conduct business. For the insurance industry, the pandemic has greatly expedited the transition to digital claims. And, while most customers infrequently make claims, it’s critical that when they do make a claim, it’s on a platform that is easy to use and secure. Identity Access Management solutions, combined with customer verification and authentication, can help insurers deliver digital solutions quickly and safely while ensuring ongoing customer satisfaction.

About The Authors
Multiple Contributors
Bill Brower

Bill Brower is vice president of claims for LexisNexis Risk Solutions. william.brower@lexisnexisrisk.com

Kim Brown

Kim Brown is director, insurance identity access management solutions, at LexisNexis Risk Solutions.  kimberly.brown1@lexisnexisrisk.com

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CLM’s Insurance Fraud Committee identifies, analyzes, and offers education on emerging fraud schemes and tactics; monitors and reports on developments in case law, state fraud statutes and applicable regulations; collaborates with other anti-fraud industry organizations and associations; and seeks to provide amicus support in matters of importance in the fight against insurance fraud.

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