Turkey’s Insurance Sector Gets Boost in Fraud Detection Methods

Insurance fraud has become a significant issue in Turkey, with estimates suggesting that around 10% of insurance claims are fraudulent, resulting in an annual loss of US$591 million. To combat this problem, Aksigorta, one of Turkey’s leading insurance companies, has implemented advanced analytics to increase its fraud detection rate by 66%.

The Need for Change

The company’s IT Division Manager, Yalcin Terlemez, highlighted the need for change in their approach to fraud detection: “It used to take our investigators six months to expose cases of organized fraud,” he explained. “SAS allows us to do it in 30 seconds.”

Aksigorta’s Solution

Aksigorta’s solution is based on an end-to-end fraud management platform provided by SAS, which enables a hybrid approach to fraud detection. The company uses:

• Data preparation
• Predictive analytics
• Financial reporting capabilities
• To prevent opportunistic and professional fraud

The insurer’s fraud detection process starts with data integration from:

• Internal systems
• Third-party sources
• Public records

This is followed by advanced analytics techniques such as:

• Anomaly detection
• Machine learning
• Artificial intelligence
• Social network analysis

The Power of Social Network Analysis

Social network analysis has been particularly effective in exposing organized fraud, allowing Aksigorta to model relationships between entities in claims and identify cases of low-volume, high-loss fraud perpetrated by criminal gangs and professional fraudsters.

Results

As a result of the implementation, Aksigorta’s fraud detection rate has increased by 66%, with proven and captured fraud rates rising from 2.4% to 6.2% over the past three years. The savings achieved are passed on to customers in the form of lower premiums.

The success of Aksigorta’s approach has also improved investigations, with:

• Lower false positives allowing investigators to focus more time on probing fraudulent claims
• Better investigation quality
• Efficiency gains
• Faster processing of genuine claims

Conclusion

Aksigorta’s achievement is a testament to the power of advanced analytics in combating insurance fraud in Turkey. By implementing a hybrid approach to fraud detection, Aksigorta has been able to increase its fraud detection rate by 66%, resulting in significant savings for customers and improved investigations.