How the detection of insurance fraud succeeds and fails

Abstract

Insurance fraud is a serious and growing problem, and there is widespread recognition that traditional approaches to tackling fraud are inadequate. Studies of insurance fraud have typically focused upon identifying characteristics of fraudulent claims and claimants, and this focus is apparent in the current wave of forensic and data-mining technologies for fraud detection. An alternative approach is to understand and then optimize existing practices in the detection of fraud. We report an ethnographic study that explored the nature of motor insurance fraud-detection practices in two leading insurance companies. The results of the study suggest that an occupational focus on the practices of fraud detection can complement and enhance forensic and data-mining approaches to the detection of potentially fraudulent claims

Informing the development of a fraud prevention toolset through a situated analysis of fraud investigation expertise

“…First, we summarise our observations of claims handling staff and the environment in which they operate, focusing primarily on findings that had implications for understanding how best to support fraud detection practices through technology. A more general description of the organisation, environment and nature of claims handling and fraud detection activities is presented elsewhere (Morley et al, 2006). Second, we report our observations of specialist fraud investigators and loss adjusters, overviewing the characteristics of their investigative practices that informed our systems design.…”

“…Mismatches between name, title, zip or postal code, policy number, inception date, and so on, are anomalies, yet many arise through innocent data entry slips, memory failures and so on. Moreover, the anomalies that are identified require expert interpretation: two different claimant names at the same address may or may not be more indicative of a fraudulent claim than the same name at two different addresses (see Morley, Ball, & Ormerod, 2006). The second technology-based approach to tackling fraud uses methods aimed at 'profiling' likely fraudsters, including techniques such as voice stress analysis (e.g., Hollien, Geison, & Hicks, 1987;Horvath, 1982).…”

Consumer Insurance Fraud/Abuse as Co-creation and Co-responsibility: A New Paradigm

“…The tensions extant within the firm as it undertakes the claim processing phase of customer service, however, were the subject of ethnographic research undertaken by Morley et al (2006) in review of British firms' claims handling practices. There, organizational goals associated with claims processing efficiency were held above those of fraud detection.…”

“…Moreover, most empirical research on the consumer-side has been survey-based, descriptive, and/or projective, with very limited exceptions involving observation or ethnographic research. The authors are aware of only limited studies of counterpart constructions and accommodative-behaviors of adjusters during the dynamic process of claims processing (e.g., Berardinelli, 2008;Morley, Ball, Ormerod, 2006 Conceptually, units of analysis may include intrapersonal (norms, motives, expectations; both sides of the dyad), dyadic (coordinated construction of the insurance proposition and associated expectations depicted as phased interpersonal exchange), firm-level (organizational "rules" and norms, motives, expectations), as well as societal (inter-firm practices, regulatory oversight and standard-setting/assessment, judicial and legislative review). At each level, units of analysis require specification and analyses.…”

Provider Fraud in California Workers' Compensation: Selected Issues

“…30 Morley, Ball, and Ormerod, 2006. 31 The list of administrative actions is adapted from U.S. Department of Health and Human Services (HHS), 2014.…”