There is an ever-increasing risk of P&C (Property & Casualty) insurance fraud, with fraudsters constantly adapting and altering their tactics in order to target insurers more effectively. As the threats grow more sophisticated, traditional rule-based systems are becoming less effective and insurance companies must find more efficient ways to detect unlawful activity at the earliest possible point, in order to reduce and prevent future loss, while providing the same high level of customer service.
BAE Systems commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study and examine the return on investment (ROI) insurance companies are able to realise by deploying its property and casualty insurance fraud solution. The purpose of this study is to provide readers with a framework to evaluate the potential financial impact of the NetReveal solution on their own organisations.
BAE Systems Property and Casualty Insurance Fraud solution for preventing and detecting claims fraud produces a single view of risk on an organisation’s claim book. Real world entities such as people, places, events, objects and suppliers and their network of social connections are viewed across huge volumes of data from multiple disparate systems, which are then queried, analysed and investigated.
To understand more effectively the benefits, costs, and risks associated with a deployment of the P&C Insurance Fraud Solution, Forrester interviewed a global, tier-1 insurance company with multiple years of experience using NetReveal in both, an on premise deployment and as BAE Systems’ OnDemand deployment option – a BAE Systems-hosted and managed delivery model.
“NetReveal allowed us to be top of the market in terms of fraud detection and it enables us to constantly adapt and change with the moving behaviours of the fraudsters.” – Head of fraud intelligence at a multinational general insurance company
The commissioned study conducted by Forrester consulting on behalf of BAE Systems (May 2016) and subsequent financial analysis suggests that, “…similar organisations that would invest in either the on premise solution or the NetReveal OnDemand service could expect the risk-adjusted ROI, payback and benefits shown in Figure 1. For every $1 invested, the company receives between $5.53 and $6.34 in return.”
The interviews conducted further revealed that:
- The introduction of BAE Systems’ solution resulted in an uplift of 100% in fraud detection
- The agility of the NetReveal tool enables the interviewed organisation to quickly adjust to new fraud patterns
- The NetReveal tool helps the new triage team to be productive
- Insurance customers also benefit from reduced fraud
- The interviewed organisation observed less service outages with the NetReveal OnDemand service as compared to the former on premise deployment