Video Q&A: LexisNexis Risk Solutions on the changing fraud landscape

In this Q&A, Izabela Chmielewska talks to Oleg Zadalia, principal solutions consultant, fraud and identity at LexisNexis Risk Solutions, about some of the key findings.

Oleg, please tell us about yourself, and your work at LexisNexis Risk Solutions.

I work as a consultant at LexisNexis Risk Solutions and interact with stakeholders, wider external audience insurance organisations and participants in the marketplace to help them pinpoint any challenges they may be facing in their businesses, and suggest appropriate solutions that could be deployed to solve these issues.

In the survey, we asked insurers and brokers to rank the areas of fraud they thought had seen the biggest increase. Opportunistic fraud was ranked highest, followed by organised and application fraud. Does this reflect your experience? What factors do you think are driving this trend?

Based on our interactions with stakeholders at insurance organisations, we believe that economic conditions influence consumers’ behaviour when they apply for insurance.

We see that legacy systems and traditional approaches to fraud detection are no longer sufficient to address the growing threat of opportunistic and organised fraud.

Oleg Zadalia

We also see that legacy systems and traditional approaches to fraud detection are no longer sufficient to address the growing threat of opportunistic and organised fraud.

Insurers must adopt a more modern approach to fraud detection, using real-time data and advanced technologies to identify and prevent fraudulent claims. This will help them to protect their customers and their bottom lines better.

According to the survey, insurance professionals are concerned with the lack of access to data in their fraud workflows. The three areas shown to be missing were access to broader shared data, market-wide prior claims data and social media data. What are the challenges of sharing data between organisations?

The common denominator of these challenges is the regulatory environment, which introduces specific data privacy and protection controls. Legacy systems also play a role, as they can create silos of information that make it difficult to provide real-time, frictionless service to consumers.

Social media is a useful source of information, but it will be challenging to deploy effectively.

Oleg Zadalia

Social media is interesting to hear about in the survey's feedback. It is a useful source of information, but it will be challenging to deploy effectively.

Insurance organisations will need to verify the data, as many data in different parts of the business need to be cleaned, verifiable or transparent. This is important if insurance organisations will share the data among themselves or externally.

They need to be confident that the data is reliable and actionable, otherwise it will just be meaningless data.

The most common challenges organisations face when managing fraud strategies are false positives, data accuracy, and access to data at the start of the customer journey. What steps can the industry take to address these challenges?

The insurance industry is moving towards adopting new technologies and data sources, as evidenced by the media coverage of AI and digital transformation. But insurers need to be bolder in their adoption of new technologies.

One challenge is that implementing new technologies requires effort to run proofs of value or proofs of concept. Sometimes, insurers are unwilling to take the risk of investing in new technologies without first having proof that they will work better than legacy systems.

The insurance industry is moving towards adopting new technologies and data sources. But insurers need to be bolder in their adoption of new technologies.

Oleg Zadalia

Insurers must be more willing to take risks and experiment with new technologies. If more insurers were to do this, we would see more proofs of concept and proofs of value being run across the industry. This would allow insurers to see the real-life results of new technologies and compare them to their legacy systems.

Based on the survey results, legacy systems are underperforming. Therefore, insurers have much to gain by adopting new technologies.

Fraud is an ever-evolving landscape. Fraudsters are constantly finding new ways to exploit loopholes and avoid detection. How can insurers future-proof their fraud prevention strategies?

Collaboration is also essential. We need to share data and work together towards a common goal to deploy new technologies and platforms that are scalable and able to keep up with the latest developments in AI.

These things need to happen in the next 12 to 24 months, otherwise AI tools will not be effective.

As we educate our customers on new technologies and methods to tackle fraud, we are developing exciting new announcements for 2024. Watch this space!

Oleg Zadalia

The insurance industry must collaborate and deploy the best possible data-sharing platform to be future-proof. This platform will add value to existing tools and help the industry to adopt new technologies more effectively.

Finally, what does LexisNexis Risk Solutions plan to help insurers with their fraud strategies in the coming year?

We are excited to be working with insurers. We have a large customer base of insurance organisations using our products, and we are grateful for their trust.

As we educate our customers on new technologies and methods to tackle fraud, we are developing exciting new announcements for 2024. Watch this space!

We hope these announcements will facilitate wider data-sharing among insurers, following a design principle we have developed. This will positively impact the industry, as other insurers will see the value of deploying new technologies and collaborating.

We hope this will lead them to join consortiums like the banking consortium in the UK, which has been very successful in helping financial institutions to tackle fraud and help consumers.

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