Process mining is helping insurance firms prevent fraud

There are over 7,000 insurance companies collecting $1 trillion in premiums each year in the US alone. The size of the industry creates significant opportunities for fraud: the FBI estimates the total cost of fraud (outside of health insurance) to be more than $40 billion per year.

In addition to losing money through criminal activity, fraud also results in payment delays for genuine claimants and extra work for those employed to deliver them. 

The private and public sectors are up against it and will need to embrace digital technology to stay ahead of fraudsters. McKinsey reports in the aftermath of the Covid-19 pandemic how “successfully preventing and resolving identity theft requires coordination across financial operations, using, for example, tiered triage rules, better prioritization of cases for further investigation, and new, digital self-service solutions.”

Using process mining, insurers can gain a clearer picture of claims and the people making them. That means a greater ability to pay out on time to legitimate claimants, while also withholding payments to those making them fraudulently. 

This is how it works with Celonis. 

Powered by its market-leading process mining technology, the Celonis Execution Management System (EMS) triggers actions to fix inefficiencies and orchestrate systems. That includes automating real-time actions across systems so genuine claims are paid out. At the same time, the EMS can alert teams to potential incidents of fraud. This could include claims made in ways that skirt the usual compliance checks. 

Because the EMS can help identify instances where claims are fraudulent, insurance firms can target their resources where they are needed. That saves companies millions. And because Celonis applies advanced algorithms and machine learning, companies receive recommendations that help them keep up with the ever-evolving tactics of fraudsters. 

The human touch is still essential. When genuine claims are blocked by AI, expect customers to express their dissatisfaction and even move to different providers. That’s why, alongside its automation capabilities, the Celonis EMS also alerts and deploys the right people to look into claims. That means skilled practitioners can get on the case when needed to ensure claims and customers are treated fairly and efficiently. 

Even so, effectively and automatically detecting fraud remains a win-win. On the one hand, insurers don’t lose money; but neither do they have to waste time trying to establish whether a claim is genuine or not. That frees up resources to focus on genuine claimants. In fact, a global insurance company using Celonis reduced claim cycle times by a whole ten days, by streamlining the overly manual process to review claims and identify which needed action.

Curious about what Celonis can do for your claims management process? Get in touch with one of our experts today. 

Edward Baggaley

Senior Content Marketing Manager

Edward writes for and about Celonis from London.