Data Driven Fraud Prevention and Detection in Health and Motor Insurance Business using Actuarial and Data Science Techniques

Abstract

Fraud acts as a major deterrent for the growth of an insurance business. In 2017, the Property newlineand Casualty sector alone incurred a loss of $34 Billion due to fraud in the USA. According to a newlinerecent survey, it is estimated that the number of false claims in the Industry is approximately newline15% of total claims. The report suggests that the Healthcare Industry in India is losing newlineapproximately Rs. 600 - Rs. 800 crores incurred on fraudulent claims annually. Our data-driven newlinefraud prevention and detection models aim to provide a holistic approach to detect and prevent newlinefraud by innovatively integrating actuarial and data science techniques. Researchers from the newlineSociety of Actuaries performed a study in Examining Predictive Modelling Based newlineApproaches to Characterising Health Care Fraud, wherein 450 research papers and articles newlinewere evaluated. They identified twenty-seven of them to be most relevant for their study. We newlineanalysed this further and arrived at an insurance fraud detection framework incorporating both newlineactuarial and data science techniques. newline