Insurance fraud consultant John Standish is on a mission, borne out of years of experience as an officer and investigator with the California Highway Patrol and as Chief of the California Department of Insurance's Fraud Division: Get insurance companies to embrace fraud analytics.
In particular, Standish points to social network analysis -- the modern-age equivalent of the "this person connects to this person" links he used to map out during his days as a fraud investigator. Today's fraud-fighting technology is so cool and efficient, "it almost makes me wish I was 30 years younger and working cases," Standish, principal with The John Standish Consulting Group, told me.
Such technology would have been a boon in fighting organized auto insurance fraudsters that ramped up their southern California operations in the late '90s, Standish said. Back then, success came the hard way -- years of feet on the street. As an example, he described how his team brought down a leading Russian ring in a five-year, multiagency operation that included 18 months of undercover work once the investigators infiltrated the group.
For legitimacy's sake, the cooperating insurance companies had to pay out $230,000 in claims during the duration, he noted. "With today's technologies, we could have wrapped that investigation up in a few months."
And so, Standish told me when we met earlier this week at SAS Global Forum 2013 in San Francisco, "this is a crusade I'm on."
As you might surmise, the top carriers in the marketplace -- companies like Allstate, CNA, and Farmers -- get it. They use analytics (yet can suffer from complacency, Standish noted). But these aren't the companies targeted by fraudsters anyway; those would be the second-tier, less savvy carriers, he said. "They target companies that do shoddy work and low ball 'em."
This is the wave of the future -- and if you're not using this technology two things are going to happen. One, people will steal your money and they'll be long gone before you ever know it. And two, you won't be able to compete against the companies that are using this technology.
Watch this video for Standish's best-practices advice for fighting auto insurance fraud, and share your experiences with auto insurance below. Have you ever felt you've been the victim of an auto insurance fraud ring -- rear-ended, for example? Do you think your auto claims adjustors do a good job?
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