FRAUDULENT claims are taking a significant toll on insurers and the longer they go undetected, the greater the insurer's vulnerability and financial burden, studies show.
SAS Malaysia business development manager Luke Soon said countering fraud would stabilise inflation premiums by helping insurers write better against dishonesty.
He said losing as much as 10% to 30% of total premiums due to fraudulent claims had been a major concern among insurance companies.
To counter this, SAS is offering the local insurance sector its latest solution suite, SAS Claims Prediction Solution.
SAS said in a statement the solution could improve loss ratios by gathering relevant claims data from every corner of the enterprise, as well as third-party data sources to provide both claims propensity and size predictions.
According to the Insurance Services Office of the US, studies conducted in the country showed that fraud in the property and casualty markets could amount to as much as US$24bil, representing 10% of total claims pay-outs.
Additionally claims management can amount to 80% of an insurer's cost.
Soon said fraud was a major concern for Bank Negara and it had formulated initiatives to improve claims handling and fraud control measures.
The claims ratio for motor insurance in the first half of 2004 rose to 151.9% due to increased claims on accidents. While most filed cases are genuine, there is good indication that fraud is becoming more rampant within the industry, he added.
He said SAS' Claims Prediction Solution would help insurers leverage the nation's collective loss experiences to understand and ultimately manage fraud better.
SAS solutions are used at more than 40,000 sites, including 90% of Fortune 500 companies. Bernama
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