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Insurance companies are now flushing out crooks thanks to artificial intelligence

Absolutely incorrigible, these insurance fraudsters. When they have a good trick, they can’t help repeating it ad infinitum… Take this physiotherapist who, before multiplying work stoppages (127 in total!) had signed no less than 20 contracts different pension schemes. While he practiced bodybuilding diligently, in his now much free time, and posted it on social networks. As for this other smart guy, he had opened several multi-peril home insurance policies on the Internet before sending water damage statements, imaginary but light enough not to trigger expert visits.

As the Agency for Combating Insurance Fraud (Alfa) points out, with supporting examples, these methods make it possible to increase the amounts embezzled: no less than 3.3 million euros in the case of our physiotherapist, and yet 26,000 euros per our budding plumber. But what the agrefins certainly don’t suspect is that the insurance companies also know how to take out the heavy artillery. No fewer than 330 companies are thus members of Alfa, thereby participating in a network of 1,600 anti-fraud correspondents.

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False claims or overestimation of damages, unjustified sick leave or fictitious health expenses: this dense network allows them to update several frauds by checking that several insurance companies have not been fooled by the same person, or operate in the same way.

With success it seems: the frauds identified by the members of this agency reached 521 million euros in 2021 against 409 million in 2020. An increase of 27%. It must be said that the methods of these insurance companies are well established. “They are divided into four phases: discovery, sorting, verification or investigation, and finally the decision”, explains Maxence Bizien, director of Alfa. And if sometimes it is only a question of cutting off the unscrupulous customer, a lawsuit can also be brought. “Companies must be able to prove fraud in order for the authorities to apply the sanctions laid down in the Insurance Act. It is therefore necessary to show rigor and precision”, adds the director.

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In detail, insurance companies often rely on good old methods, such as the use of private investigators, especially with regard to personal insurance (maintenance contracts, for example). “We then work together because there is surveillance and spinning,” explains Pascal Burgueyre, a private detective based in the Bordeaux region. As the insurance companies do not have access to the medical record, in such cases it is a matter of noting whether a policyholder’s business is in accordance with the information he has communicated to the insurance companies.

But that’s not all: Faced with fraudsters who do not hesitate to exploit new digital tools, insurance companies have turned to artificial intelligence. “Anti-fraud managers work empirically and try to spot irregularities. Digital tools therefore allow a more systematic control and the identification of operational patterns are invisible to these managers who study each file separately”, develops Benoît Legros, Commercial Director for Shift Technology.

Thus, this startup collects the data that companies provide on a daily basis, which makes it possible to detect certain modes of operation, such as a disaster that occurs right after a subscription. The algorithms used also compare documents from different folders. “These automated checks, for example between invoices allegedly issued by the same workshop, make it possible to detect forgeries”, explains Thomas Dognin, France director of IBM’s artificial intelligence solutions, which has its own offer in this area.

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These algorithms sometimes cross insurer databases with external information. Enough to flush out a person who is compensated because she is supposedly unable to work, but who at the same time would have set up her own business. The final contribution of this software is the ability to spot a scammer… even before he strikes! It is true that a professional con artist rarely transmits his true identity. “We work more and more with document fraud, for example forged identity papers. This makes it possible to detect potential fraud as soon as the contract is signed,” confirms Benoît Legros.

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So many tools that make the work of air traffic controllers easier. Because it is impossible to do without any human intervention. “Suspects of fraud are transferred to the managers, who then analyze the files and carry out their own investigation”, explains Benoît Legros. “Technological tools help the insurance companies in their control process, but it is not a panacea. Above all, digitization makes it possible to speed up detection,” confirms Maxence Bizien. Bodybuilder physical therapists just need to watch out!

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