1 © 2009 Experian plc. All rights reserved.
Confidential
HICFG4th November 2011
Paul YellandConsultantID & Fraud
Presenter’s name
Experian’s proposed PMI Counter Fraud Solution & Data Pilot
© 2010 Experian Limited. All rights reserved. 2
Sales: $3.9 billion
Profits: $910 million
Market cap: £6.7 billion
In top 50 of FTSE-100
Net Debt: $1.6 billion
Employees: c. 15,000
Offices in 40 countries
Largest markets: UK, US, Brazil
Corporate headquarters: Dublin
Main offices: London, Costa Mesa (US), Nottingham (UK), Sao Paolo (Brazil)
Our businessExperian – a snapshot
© 2010 Experian Limited. All rights reserved. 3
Our businessGlobal reach
Experian operates in 40 countries and supports Clients in over 90 countries
© 2010 Experian Limited. All rights reserved. 4
Insurance Fraud 2009 - 2010
% of policies / claims processed marked to fraud
Xmas activity peakXmas activity peak
Xmas activity peakXmas activity peak
© 2010 Experian Limited. All rights reserved. 5
Up to Date Fraud Statistics
© 2010 Experian Limited. All rights reserved. 6
Tools applied at different stages of the insurance process
Customer acquisition MTA Claims Renewal
CUEInsurance investigator
• Fraud investigation
• Single input
• Links addresses
• Bridges databases
• Red/green/amber
Hunter II• Fraud Networks
• Identifies known fraudsters
• Highlights fraud rings
• Fraud case management tool
Market Underwriting Quote accept Cross sell
Change
coverClaim Fraud Trace Renew
1 2 3 4 5 6 7 8 9
• Confirms claims history
• High lights multiple claims
• Meets CRU legislation
• CUE PI e-messaging
Authentication• Verifies Name
• Verifies Address
• Covers Sanctions
7 © Experian Limited 2007. All rights reserved.Confidential and proprietary.
Fraud and Identity SolutionsHelping you answer key questions
Identity
Does this person exist?
Is this person who they say they are?
Is the person a fraudster?
Are they lying to me?
Has the any of the information provided been used to defraud me or anyone else before?
Fraud
Is the information they have provided correct?Are they old
enough?
Are they a risk?
AuthenticationIdentity
Questions
CUE
Hunter
UK Only Product
International Product
UK & US Only Product
* Experian also has a Detect system in Italy
Investigator
© 2009 Experian Limited. All rights reserved.8
Matching to known / suspected fraudsters or fraud intelligence
Fraud profiling
Network Link Analysis
Retrospective matching
Methods of detecting and preventing fraud
Validation of supplied data within application
Checking supplied details for Matches, Inconsistencies & Anomalies against trusted data sources
© 2010 Experian Limited. All rights reserved. 9
FSA / SRA Alerts
FSA / SRA Alerts
Client Suspect Files
Client Suspect Files
Insurance Hunter
Insurance Hunter
CCJsCCJs
Victims of FraudVictims of Fraud
Consumer Bank Accounts
Consumer Bank Accounts
Sanctions & PEPS
Sanctions & PEPS
Mail Redirections / NCOA
Mail Redirections / NCOA
Telephone SubscribersTelephone
Subscribers
Suspicious Activity Score
Suspicious Activity Score
Address LinksAddress Links
Consumer Credit Accounts
Consumer Credit Accounts
Previous Credit Applications
Previous Credit Applications
Data assets used for fraud prevention
Mortality RecordsMortality Records
Credit SearchesCredit Searches
National HunterNational Hunter
Electoral Roll Electoral Roll CIFASCIFAS
Mail Drop / Accommodation
Addresses
Mail Drop / Accommodation
Addresses
AVS / CCV2 Check
AVS / CCV2 Check
© 2010 Experian Limited. All rights reserved. 10
Hunter II
Most widely used antifraud system in UK Insurance & Banking sectors covering……….. Motor insurance
Household insurance
Pet insurance
Travel insurance
Creditor insurance
12.5m policies and claims processed p.a.
Contains over 65m policies and claims
32,000 known insurance frauds
350,000 known finance frauds
11 © 2009 Experian plc. All rights reserved.
Confidential
Insurance Clients
12 © 2009 Experian plc. All rights reserved.
Confidential
Experian largest UK Financial Service
Provider
Financial Service Clients
13 © 2009 Experian plc. All rights reserved.
Confidential
Experian’s ID & Fraud management solutionWhat is it and what does it do ?
Application Fraud prevention system for Insurance
Fraud protection at
Policy application stage
Claims application stage
(also mid-term policy changes)
Screens for & highlights potentially fraudulent activity
By the insured party / claimant
By service provider
By broker
14 © 2009 Experian plc. All rights reserved.
Confidential
Experian’s ID & Fraud management solutionWhat it will help to find
Types of suspicious / fraudulent activity
Fake & multiple claims Un-bundling of treatments
Multiple policies Up-Coding of treatments
Witheld personal information
Pre-existing conditions Previous claims
Extended treatments
Physio Hospital stay
Fake service providers Extended billing (eg. after death)
Membership fraud (Identity theft) Equipment / medicines not provided *
Tiered billing Collusion between brokers & members
Fraud Rings Providing treatments without accreditation *
Money Laundering High risk territories & groups
eg. Nigeria (Lebanese) eg. Kenya (Indian providers)
15 © 2009 Experian plc. All rights reserved.
Confidential
Experian’s ID & Fraud management solutionHow do we know ?
The case for Data Sharing – Proven to work
FACT - Clear evidence that data sharing delivers significant gains for detection of
Higher volumes of fraud
Greater variety of fraud types, trends & patterns
The more data shared (group, national, international) – the more effective it gets
FACT - Insurers targeted by same individuals / criminals / gangs
Share the same data & discrepencies
FACT - Experian’s solution has been industry standard since 2000
Processes > 13m claims / yr
Used most widely in Home & Motor
Equally applicable to Medical Insurance
16 © 2009 Experian plc. All rights reserved.
Confidential
National Hunter
Applications Applications
Frauds Frauds
Cards / Loans Mortgage
Applications
Frauds
Asset Finance
CIFAS CIFAS CIFAS
Data sharing to find fraud in other sectors
Over 350,000 Known Frauds
1,700,00030,000,000 1,300,000
42 clients 39 clients 10 clients
Applications Processed:
Contributors:
Insurance
Hunter
Applications
Frauds
CIFAS
8 clients
12,000,000
40,000 Known Frauds
17 © 2009 Experian plc. All rights reserved.
Confidential
Experian’s ID & Fraud management solutionHow it works
The devil is in the detail – historical evidence
Solution invoked at time of New Policy application or Claim (fully automatic)
Search against all historical policy & claim records (internal & external) & “watchlists” for any connections which may be deemed “suspicious” or “fraudulent”
Checks for Data Inconsistencies & Data Matches which may indicate
Provision of mis-information (eg age)
Witholding of information (eg claims, pre-existing conditions)
Hidden adverse information / other historical conflicts
Fraud Scoring prioritises identified cases (according to % fraudulence)
Enables investigators to review cases
Make judgements ….. Take actions (approve / decline / don’t pay)
Record findings / results / actions …… And to SHARE this information onwards
Prev. Policies & Claims
(From Insurer’s own
& PMI Community)
Experian’s ID & Fraud management solution
Fully hosted solution
High Risk
Data
ID & Fraud Management Solution
Referral
policy rules
Fraud risk Scores
Referrals &case management
Record frauds &suspicions
Fraud networks
Experian’s Data
• >47m Voters Roll• > 200m CAPS • >136m A&A• >330m Address• >95m Detect• + MORE +
Experian’s Data
• >47m Voters Roll• > 200m CAPS • >136m A&A• >330m Address• >95m Detect• + MORE +
Insurance Hunter
• > 5m Policies & Claims
• > 30k known Frauds
Insurer’s Policy Admin
systemOnline Results
(optional)
XML Data Extract
New
Po
licies
New
Claim
s(+
Repeat treatm
ents &
episodes)
CUE
Underwriters
Investigators
Authenticate
Questions• Verify• Validate
Authentication scores
Experian
National Hunter?
CIFAS?
19 © 2009 Experian plc. All rights reserved.
Confidential
Flexible Rules – define your fraud business strategy
Define to the system What we are looking for How to treat Cases
Experian – expertise in rules management consulting Rules Management Service (RMS) Clear data as well as known fraud / suspect
Varied rules palette Inconsistencies
Across databases, claims, personal / corporate / medical details
Anomalies & Data Matches
Trends, patterns & exceptions Patterns indicative of fraud Known frauds & suspects Fraud rings
Fraud scoring prioritises cases
Rules (100’s) Suspect member
Individual / Company
Suspect provider
Suspect broker
Non Disclosure of personal data
Fictitious / falsified parties
Variance to policy / geographical cover
Treatment codes
Abnormal costs
Pre-existing conditions
Multiple / false claims
Multiple policies
Same phone
Same bank details
Fraud rings
Known fraud Intelligence
Suspect / fraudster
Rules (100’s) Suspect member
Individual / Company
Suspect provider
Suspect broker
Non Disclosure of personal data
Fictitious / falsified parties
Variance to policy / geographical cover
Treatment codes
Abnormal costs
Pre-existing conditions
Multiple / false claims
Multiple policies
Same phone
Same bank details
Fraud rings
Known fraud Intelligence
Suspect / fraudster
Key Features
Data Services - Automated Cross-Matching
Own data
Historic insurance policy and claims (Insurer’s own)
PMI community shared data
Historic Insurance policy and claims (other PMI’s data)
High Risk database – Private User Group
Historic “watchlist” database of known suspicious / fraudulent health insurance policies and claims
Insurance Hunter
Insurance frauds (non Health)
Historic insurance policy and claims (non Health)
National Hunter
UK banking and retail National Frauds
CUE
Motor and Home historic claims data
Referrals / Case Management
Automated Referral Management
Full Match Information
For all instances of data inconsistency, anomaly or presence on a “watch-list”
Fraud Investigation Platform
Full referral management using intelligent workflow
Policy rules & scoring determine prioritisation of cases to investigations team
Tailored to Insurer’s requirements & operational set-up
Industry leading workbench functionality
User screens & dedicated functionality
Notes making facilities
Automatic updates (own & external databases)
Perpetuates data-sharing cycle
Fraud ring analysis (using I2)
Numbers of apparently valid claims which have suspicious connections
21 © 2009 Experian plc. All rights reserved.
Confidential
Key benefitsKey benefits
Significant reduction in losses due to unethical / criminal / fraudulent activity
• Consequential uplift in profitability
• Improve competitive stance from a premium perspective
Improve levels of customer service, risk management and control over policy
Ensure SI unit are focussed on the cases most likely to be fraud
Additional recording & sharing of data improves effectiveness YoY
Typical ROI to Insurance Clients
Product Data sharing Own data only
Overall 22:1 12:1
22 © 2009 Experian plc. All rights reserved.
Confidential
Paul Yelland
Consultant
Identity & Fraud
07973 799 448