Biometric Identification – An Efficient Weapon against Frauds in Insurance Industry

With the proliferation of online channels, consumer conveniences and even continuous developed tactics of fraudsters, deploying some degree of biometric technology will become a competitive necessity. As the insurance industry continues to expand consumer services because of e-commerce and m-commerce, there is no doubt that new applications of biometrics will come about. Given insurers’ focusing on risk, it would seem to be only a matter of time before the majority agree that biometric security is more than worth the investment. No matter the insurance fraud, if insurance companies brought in new identification methods like biometrics solution to identify the claimants, this will become an efficient weapon against frauds in insurance. Taking a simple example, using facial recognition online or via a mobile device could fraudsters from a database, which can save the insurance industry millions of fraud and at the same time help to reduce the cost of all of policies.

Biometric Identification – An Efficient Weapon against Frauds in Insurance Industry

Biometric Identification – An Efficient Weapon against Frauds in Insurance Industry

One area where biometrics has begun to take hold is healthcare insurance. A study in 2014 by the Ponemon Institute showed that there were nearly 1.5 million Americans to be victims of medical identity theft. Healthcare fraud is estimated to cost between $70 billion and $255 billion a year, which take account of approximately 10% of total U.S. healthcare costs. Many insurers are using biometrics to reduce billing fraud by eliminating the sharing of medical insurance cards among patients, or avoiding assumption of another’s identity. For instance, as alternative to paper insurance cards, iris biometric can immediately transport proof of a patient’s physical presence at a healthcare facility. Biometric technology is also supporting healthcare insurers with compliance and data integrity standards, in specialty with those policies set by the Health Insurance Portability and Accountability Act (HIPAA). For example, besides adherence to requirements for automatic logoff and user identification, insurers must implement additional safeguards that include PINs, passwords and some method of biometrics.

In accordance with Aite Group’s report in 2012, the war against fraud in property and casualty (P&C) insurance is also increasing rapidly. The organization estimates that claim fraud in the U.S’s P&C industry cost carriers $64 billion in 2012 and will reach $80 billion by 2015. Customers have been influenced particularly in these scams. While the focus on protecting consumer data has primarily centered on online channels, fraudsters are now also concentrating on the phone channel. Utilizing information collected from social media networks, thieves are manipulating call center representatives and gathering customer information. To solve these urgent issues, biometric is chosen to deploy in fraudsters identification and prevention. Representatives can cross reference incoming calls against a watch list of known fraudsters by identifying unique voice prints. Advanced biometric techniques can also identify fraud patterns based on speech analytics, talk patterns and various danger warning interactions.

Even though insurance providers haven’t fully embraced biometric security, they probably will. The survey from insurance and risk magazine reports 2014 stated that out of 43 insurance providers participated in found that nearly half of them used biometric security. For example, in 2013, health insurer Amerigroup Community Care of Florida, a wholly owned subsidiary of WellPoint, Inc., has selected Deerfield Beach, Fla.-based BioClaim, a biometric solution that is intended to help ensure that the services patients receive and those for which healthcare providers are billing match up.  Additionally, in 2013, to overcome the security limitations of phone based communication with policy holders in India; insurers are looking to use multilingual speech recognition and voice biometrics to securely automate customer acquisition and servicing processes. A speech-based mobility solution will allow insurance companies to significantly cut down the costs of customer interaction while simultaneously enhancing security and customer satisfaction.