Financial Crime World

Singapore’s Insurance Sector Boosts Anti-Fraud Tech Efforts Amid Rising Fraud Concerns

The COVID-19 pandemic has led to a surge in fraudulent activities, prompting insurers in Singapore to adopt advanced technologies to detect and prevent fraud.

Advanced Technologies Used by Insurers

A recent study by the Coalition Against Insurance Fraud and SAS found that:

  • 80% of insurance companies in Singapore are using predictive modeling to identify suspicious claims, up from 55% in 2018.
  • 65% of respondents reported incorporating text mining technology to analyze written resources for fraudulent activity.
  • Over 30% of respondents reported incorporating image-based fraud prevention techniques, such as photo recognition and analytics, to determine the authenticity of claimed damages.

Growing Reliance on Automated Fraud Detection Solutions

The study highlighted the growing reliance on automated fraud detection solutions, with referrals from these systems increasing from:

  • 20% in 2018 to 30% in 2021.
  • Insurers are also embracing alternative data sources, including:
    • Unstructured data
    • Public records
    • Industry fraud alerts
    • Social media data

Challenges and Opportunities

Despite the benefits of anti-fraud technology, implementation challenges persist. The biggest barriers to deploying fraud detection tech include:

  • Limited IT resources (68%)
  • Poor data quality (64%)
  • Budget constraints, with 68% of respondents expecting no significant changes in funding for the next 12 months.

However, insurers are optimistic about the potential of advanced analytics to combat fraud. A majority of respondents (54%) are considering investing in predictive modeling within the next 12-24 months.

Top Investment Areas

The study revealed that the top investment areas for insurers over the next year will be:

  • Detection of claims fraud
  • Underwriting or point-of-sale fraud/rate evasion
  • Cyber fraud
  • Identity verification/authentication technology (31% of respondents planning to invest)

Conclusion

As the total cost of insurance fraud in Singapore remains a significant concern, the adoption of anti-fraud technologies will be crucial for insurers to stay ahead of fraudulent activities and protect their customers. With the continued growth of advanced analytics and alternative data sources, it is likely that insurers will become even more effective at detecting and preventing fraud in the years to come.