Experian’s proposed PMI Counter Fraud Solution & Data
Pilot
HICFG
4th November 2011
Paul Yelland
Consultant
ID & Fraud
Presenter’s name
© 2009 Experian plc. All rights reserved.
Confidential
1
Our business
Experian – a snapshot
 Sales: $3.9 billion
 Profits: $910 million
 Market cap: £6.7 billion
 In top 50 of FTSE-100
 Net Debt: $1.6 billion
 Employees: c. 15,000
 Offices in 40 countries
 Largest markets: UK, US, Brazil
 Corporate headquarters: Dublin
 Main offices: London, Costa Mesa (US),
Nottingham (UK), Sao Paolo (Brazil)
© 2010 Experian Limited. All rights reserved.
2
Our business
Global reach
Experian operates
in 40 countries and
supports Clients in
over 90 countries
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Argentina
Australia
Austria
Belgium
Brazil
Bulgaria
Canada
Chile
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China
Costa Rica
Czech Republic
Denmark
Estonia
Finland
France
Germany
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Greece
Hong Kong
India
Ireland
Italy
Japan
Malaysia
Mexico
© 2010 Experian Limited. All rights reserved.
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Monaco
Morocco
Netherlands
New Zealand
Norway
Poland
Russia
Singapore
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South Africa
South Korea
Spain
Sweden
Taiwan
Turkey
United Kingdom
United States
3
Insurance Fraud 2009 - 2010
 % of policies / claims processed marked to fraud
0.25%
0.20%
Xmas activity peak
Xmas activity peak
0.15%
All
0.10%
% < 90 days
0.05%
0.00%
© 2010 Experian Limited. All rights reserved.
4
Up to Date Fraud Statistics
Fraud Rate as % of Applications
0.18%
0.16%
0.14%
0.12%
0.10%
0.08%
Fraud Rate
0.06%
0.04%
0.02%
0.00%
© 2010 Experian Limited. All rights reserved.
5
Tools applied at different stages of the insurance
process
Customer acquisition
1
2
Market
3
Under
writing
4
Quote
accept
5
Cross
sell
Renewal
Claims
MTA
6
Change
cover
7
Claim
8
Fraud
Authentication
Hunter II
• Verifies Name
• Fraud Networks
• Verifies Address
• Identifies known fraudsters
• Covers Sanctions
• Highlights fraud rings
9
Trace
Renew
• Fraud case management tool
Insurance investigator
• Fraud investigation
CUE
• Confirms claims history
• Single input
• High lights multiple claims
• Links addresses
• Meets CRU legislation
• Bridges databases
• CUE PI e-messaging
• Red/green/amber
© 2010 Experian Limited. All rights reserved.
6
UK Only Product
International Product
Fraud and Identity Solutions
Helping you answer key questions
UK & US Only Product
Fraud
Identity
Does this
person exist?
Are they old
enough?
Is the
Is this person Is the person a Has the any of
information they who they say fraudster?
the information
have provided they are?
provided been
Are they lying to
correct?
used to defraud
me?
me or anyone
else before?
Are they a risk?
Authentication
Identity
Questions
CUE
Hunter
Investigator
© Experian Limited 2007. All rights reserved.
Confidential and proprietary.
* Experian also has a Detect system in Italy
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 Fraud profiling
 Network Link Analysis
 Retrospective matching
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Validation of supplied data within application
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Checking supplied details for Matches, Inconsistencies
& Anomalies against trusted data sources
© 2009 Experian Limited. All rights reserved.
Scoring
 Matching to known / suspected
fraudsters or fraud intelligence
Own / Group / Consortia
Methods of detecting and preventing fraud
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Data assets used for fraud prevention
Credit Searches
Electoral Roll
AVS / CCV2
Check
CIFAS
Previous Credit
Applications
Mortality
Records
Mail Drop /
Accommodation
Addresses
National Hunter
Consumer
Credit Accounts
Telephone
Subscribers
Consumer Bank
Accounts
Insurance
Hunter
Address Links
Mail Redirections /
NCOA
Victims of Fraud
Client Suspect
Files
Suspicious
Activity Score
Sanctions &
PEPS
CCJs
FSA / SRA Alerts
© 2010 Experian Limited. All rights reserved.
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Hunter II
Most widely used antifraud system in UK
Insurance & Banking sectors
covering………..
 Motor insurance
 Household insurance
 Pet insurance
 Travel insurance
 Creditor insurance
 12.5m policies and claims processed p.a.
 Contains over 65m policies and claims
 32,000 known insurance frauds
 350,000 known finance frauds
© 2010 Experian Limited. All rights reserved.
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Insurance Clients
© 2009 Experian plc. All rights reserved.
Confidential
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Financial Service Clients
© 2009 Experian plc. All rights reserved.
Confidential
12
Experian’s ID & Fraud management solution
What is it and what does it do ?
Application Fraud prevention system for Insurance

Fraud protection at

Policy application stage

Claims application stage


(also mid-term policy changes)
Screens for & highlights potentially fraudulent activity

By the insured party / claimant

By service provider

By broker
© 2009 Experian plc. All rights reserved.
Confidential
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Experian’s ID & Fraud management solution
What it will help to find
Types of suspicious / fraudulent activity
Fake & multiple claims
Un-bundling of treatments
Multiple policies
Up-Coding of treatments
Witheld personal information
Extended treatments

Pre-existing conditions

Physio

Previous claims

Hospital stay
Fake service providers
Extended billing (eg. after death)
Membership fraud (Identity theft)
Equipment / medicines not provided *
Tiered billing
Collusion between brokers & members
Fraud Rings
Providing treatments without accreditation *
Money Laundering
High risk territories & groups

eg. Nigeria (Lebanese)

eg. Kenya (Indian providers)
© 2009 Experian plc. All rights reserved.
Confidential
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Experian’s ID & Fraud management solution
How do we know ?
The case for Data Sharing – Proven to work

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FACT - Clear evidence that data sharing delivers significant gains for detection of

Higher volumes of fraud

Greater variety of fraud types, trends & patterns
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The more data shared (group, national, international) – the more effective it gets
FACT - Insurers targeted by same individuals / criminals / gangs
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Share the same data & discrepencies
FACT - Experian’s solution has been industry standard since 2000
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Processes > 13m claims / yr
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Used most widely in Home & Motor
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Equally applicable to Medical Insurance
© 2009 Experian plc. All rights reserved.
Confidential
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Data sharing to find fraud in other sectors
Over 350,000 Known Frauds
40,000
Known Frauds
National Hunter
Insurance
Hunter
Applications
Processed:
Contributors:
CIFAS
CIFAS
CIFAS
CIFAS
Frauds
Frauds
Frauds
Frauds
Applications
Applications
Applications
Applications
Cards / Loans
Mortgage
Asset Finance
30,000,000
42 clients
1,700,000
39 clients
1,300,000
10 clients
© 2009 Experian plc. All rights reserved.
Confidential
12,000,000
8 clients
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Experian’s ID & Fraud management solution
How it works
The devil is in the detail – historical evidence

Solution invoked at time of New Policy application or Claim (fully automatic)
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Search against all historical policy & claim records (internal & external) & “watchlists”
for any connections which may be deemed “suspicious” or “fraudulent”
Checks for Data Inconsistencies & Data Matches which may indicate

Provision of mis-information (eg age)
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Witholding of information (eg claims, pre-existing conditions)
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Hidden adverse information / other historical conflicts
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Fraud Scoring prioritises identified cases (according to % fraudulence)
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Enables investigators to review cases
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Make judgements ….. Take actions (approve / decline / don’t pay)
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Record findings / results / actions …… And to SHARE this information onwards
© 2009 Experian plc. All rights reserved.
Confidential
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Experian’s ID & Fraud management solution
ID & Fraud Management
Solution
Experian
Authentication scores
New Claims
New Policies
(+ Repeat treatments &
episodes)
Authenticate
Questions
• Verify
• Validate
Prev. Policies & Claims
(From Insurer’s own
Referral
Experian’s Data
& PMI Community)
• >47m Voters Roll
• > 200m CAPS
• >136m A&A
• >330m Address
• >95m Detect
• + MORE +
policy rules
Insurer’s
Policy Admin
system
XML Data Extract
Fraud risk
Scores
Insurance Hunter
• > 5m Policies & Claims
• > 30k known Frauds
Online Results
(optional)
CUE
Referrals &
case management
Underwriters
Record frauds &
suspicions
National
Hunter?
CIFAS?
High Risk
Data
Fraud networks
Investigators
Fully hosted solution
Flexible Rules – define your fraud business strategy
Rules (100’s)
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Define to the system
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What we are looking for

How to treat Cases
 Individual / Company
 Suspect provider
Experian – expertise in rules management consulting
 Suspect broker

Rules Management Service (RMS)
 Non Disclosure of personal data
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Clear data as well as known fraud / suspect
 Fictitious / falsified parties
 Variance to policy / geographical
cover
Varied rules palette
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Inconsistencies
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 Treatment codes
Across databases, claims, personal / corporate / medical
details
Anomalies & Data Matches
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 Suspect member
 Abnormal costs
 Pre-existing conditions
 Multiple / false claims
Trends, patterns & exceptions
 Multiple policies
 Same phone
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Patterns indicative of fraud
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Known frauds & suspects
 Fraud rings
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Fraud rings
 Known fraud Intelligence
 Same bank details
 Suspect / fraudster
Fraud scoring prioritises cases
© 2009 Experian plc. All rights reserved.
Confidential
19
Key Features
Data Services - Automated Cross-Matching
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Own data
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Historic insurance policy and claims (Insurer’s
own)
Referrals / Case Management

Automated Referral Management
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PMI community shared data

Historic Insurance policy and claims (other PMI’s
data)
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High Risk database – Private User Group


Historic “watchlist” database of known suspicious
/ fraudulent health insurance policies and claims
Insurance Hunter

Insurance frauds (non Health)

Historic insurance policy and claims (non Health)


For all instances of data inconsistency,
anomaly or presence on a “watch-list”
Fraud Investigation Platform
Full referral management using intelligent
workflow

Policy rules & scoring determine prioritisation of
cases to investigations team

Tailored to Insurer’s requirements & operational
set-up
Industry leading workbench functionality

User screens & dedicated functionality

Notes making facilities

Automatic updates (own & external databases)

Perpetuates data-sharing cycle
National Hunter


Full Match Information
UK banking and retail National Frauds
CUE

Motor and Home historic claims data

Fraud ring analysis (using I2)

Numbers of apparently valid claims which have
suspicious connections
Key benefits

Significant reduction in losses due to unethical / criminal / fraudulent activity
• Consequential uplift in profitability
• Improve competitive stance from a premium perspective

Improve levels of customer service, risk management and control over policy

Ensure SI unit are focussed on the cases most likely to be fraud

Additional recording & sharing of data improves effectiveness YoY
Typical ROI to Insurance Clients
Product
Data sharing
Own data only
Overall
22:1
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Confidential
12:1
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Paul Yelland
Consultant
Identity & Fraud
paul.yelland@uk.experian.com
07973 799 448
© 2009 Experian plc. All rights reserved.
Confidential
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