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Bust out fraud: New Strategies

for Fraud Prevention


issue 2

Tap the power of predictive analytics to stop the guesswork and fight fraud

inside this issue


Activating Big Data Analytics to Drive
Innovation

Research From Gartner:


Innovative Insurers: Harnessing the
Nexus of Forces for
Competitive Advantage

Uncovering More Fraudulent Health


Care Providers with FICO Identity
Resolution Engine

About FICO

Activating Big Data Analytics


to Drive Innovation
The insurance industry is going through a sea change with operational
costs, regulatory pressures, competition and claim expenses all on the rise.
However, Big Data Analytics is a potential game changer that could save
insurers billions of dollars.
Annual losses to insurance claims fraud is estimated at $40 billion per
annum. Fortunately, the emergence of Big Data, combined with predictive
analytics and link analysis, offers insurers a powerful weapon for fighting

12

fraud. While many insurers have yet to leverage Big Data, forward-looking
insurers stand to reap enormous benefits by embracing it.

Big Data Analytics: A Double-edged Sword for Insurers


Predictive analytics helps combat insurance fraud by identifying patterns
in claims that are indicative of fraud. Analytic models analyze transactional
and relationship data, enabling insurers to uncover formerly unknown types
of fraud, identify ongoing schemes, and discover fraud networks.
It would seem obvious that more data would only help in this effort.
However, Big Data sometimes presents too many potential paths and
overwhelms an insurers ability to sift through the really meaningful data.
Insurers must invest either in-house or through outsourcing in the
analytic expertise to filter Big Data. In other words, insurers need to know
what questions to ask to focus their anti-fraud efforts on the most relevant
data. Only by asking the right questions can insurers get meaningful
answers in the fight against fraud.
Featuring research from

Source: FICO

Link Analysis: Stretching Big Data a Mile Wide

Link analysis is a data-hungry process that is bolstered by

When a reviewer examines an insurance claim, its helpful to

Big Datas broad reach. The key to link analysis is identifying

see the bigger picture. This is where link analysis comes in. Its

relationships across as many sources as possible. More data

a data-analysis technique that examines relationships between

yields more information about more relationships.

organizations, people and transactions.


Link analysis ferrets out related claims that may not appear to
be related. For instance, a suspicious auto body shop may be
handling an unusually high number of accident repairs. Link
analysis might show the body shop isnt the culprit, but may be
part of a pool of crooked attorneys, victims and vehicle owners
taking vehicles to the same shop. Viewed individually, each
claim may look legitimate. But viewed in a broader context, the
fraudulent pattern becomes clear.

Big Data, Big Opportunity


Big Data is a potential game changer. Added to predictive
analytics and link analysis, it helps insurers detect more fraud,
reduce false positives, and improve customer satisfaction by
streamlining payment of legitimate claims.
While the industrys record of embracing new technology
is mixed, the potential payoff from Big Data is extremely
compelling. But to reap the benefits of Big Data, insurers must
do more than build larger databases. They must invest in the
technology and expertise needed to apply Big Data in a fruitful

2 l Bust out fraud: New Strategies for Fraud Prevention

and efficient manner.

Bust out fraud: New Strategies for Fraud Prevention is published by FICO. Editorial content supplied by FICO is independent of Gartner analysis. All Gartner research is used with Gartners
permission, and was originally published as part of Gartners syndicated research service available to all entitled Gartner clients. 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
The use of Gartner research in this publication does not indicate Gartners endorsement of FICOs products and/or strategies. Reproduction or distribution of this publication in any form
without Gartners prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the
accuracy, completeness or adequacy of such information. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related
legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include
firms and funds that have financial interests in entities covered in Gartner research. Gartners Board of Directors may include senior managers of these firms or funds. Gartner research is
produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner
research, see Guiding Principles on Independence and Objectivity on its website, http://www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.

Research from Gartner Best Practice G00239787,


Kimberly Harris-Ferrante,
19 October 2012

Innovative Insurers: Harnessing the Nexus of Forces for


Competitive Advantage
The Nexus of Forces is transforming the P&C and life insurance
industry, and providing new opportunities for information
innovation. The combination of new data, enhanced analytics,
flexible business processes and technologies will allow insurers
to manage and modify business processes in real-time.

Identify how real-time information and analytics can be


used in combination with BPM technologies to automate
traditionally manual tasks, such as policy issuance, claims
notifications and generation of cross-sell offers.

Introduction
Key Challenges
The Nexus of Forces defined as the combined impact of
social, cloud computing, enhanced information and mobility
is showing dramatic potential to change the insurance
industry. Unfortunately, only a few innovators have grasped
the potential of these forces and have altered their business
model and embraced these technologies for competitive
advantage.
While many insurers are investing heavily in data
warehousing, business intelligence (BI) and analytics, most
companies are focused on data insight, including reporting.
Most insurers fail to understand the prerequisites for realtime action, such as accessible business logic in core systems,
the need for business process management (BPM) systems
that expose business rules, and real-time notifications to staff
to expose risks or be leveraged in decisioning (for example,
underwriting or claims investigation).

Assess how social media and wireless technologies


(including machine to machine [M2M]) can support product
development, usage-based products, claims, underwriting
and product intelligence.
Modernize claims and underwriting fraud management
through the use of new data (including unstructured and
social), solutions and processes to help reduce losses and
predict fraudulent behavior in real-time.
Ensure that customer-facing and core processing systems
(including underwriting, claims and new business) are realtime, and allow key decision makers to quickly and easily
change rules and processes to support real-time action.

Gartner has identified the Nexus of Forces as a key transition


element for many industries, including the insurance sector.
The intersection of cloud, mobility, social and information
is driving change and allowing future-thinking insurers to
capitalize on these advancements for competitive advantage.
Information innovation is one example where the nexus is
opening up new opportunities for insurers never possible in
the past, especially in areas such as new product development
leveraging mobile and M2M processing, more powerful data
analysis using unstructured data and real-time action, as
information is combined with modern core business processing
systems. However, Gartner customer interactions reveal that
only a few innovative insurers have build strategies, to date,
which identify business opportunities as a result of the Nexus of
Forces and how they can use this to differentiate in areas such
as product innovation, risk management, customer interaction
or operations. Companies can establish new business processes,
which leverage information for improved decisioning, process
automation and corporate intelligence (e.g., including market,

Bust out fraud: New Strategies for Fraud Prevention l 3

Recommendations

P&C and life insurers are increasingly recognizing the power


that enhanced data visibility and analytics can provide to their
organizations. During the past few years, companies have
improved their capabilities in BI and analytics. During this era,
focus has been on leveraging internal data assets for real-time
visibility into performance and reporting. More recently, the
focus expanded to include enhanced visualization techniques
(e.g., dashboarding) and predictive modeling, but remains
targeted at information use and analysis, failing to focus on
how to use the information derived in this analysis for realtime organizational action. Today, innovative insurers are going
beyond traditional data management and analysis practices
to seek ways to use information to innovate, and are centrally
interested in having actionable insight directly related to
business advancements.

competitive, customer, risk, and operational). All of this will


help fulfill enterprise agility, therefore making insurers able to
stay competitive and shift with emerging market conditions
during the next 10 years.

Offering fleet managers behavioral feedback, using telematics.


Black-box technology can be used to help manage the risks of
commercial fleet insurance, as well as offer drivers and fleet
operators information on driving risks.

P&C and life insurers must understand the opportunities that


new technology enhancements are making on the industry,
and how leaders are embracing the nexus for business
transformation. CIOs, IT leaders, chief marketing officers
(CMOs) and other business leaders should carefully evaluate the
short- and long-term impact of information innovation on their
business model and identify ways to obtain better value from
existing and emerging data assets and technologies. Gartner has
identified four best practices that insurers should evaluate to get
maximum value from their information assets and leverage to
stay competitive.

Telematics data can also be utilized in actuarial departments


to help with improved risk modeling and pricing. Some U.S.
insurers, for example, launched teen driving programs during
the last few years, which install a box into the car to provide
driving data to the insurer and provide parents with valuable
information, such as driving behavior and tracking (e.g.,
location of car can be seen on the Internet, leveraging the
GPS in the box).

Analysis
There are four best practices that life and P&C insurers need
to evaluate when positioning information as an enabler of
innovation. Companies should look at these options as they
build their information management strategies and evaluate the
examples provided.

4 l Bust out fraud: New Strategies for Fraud Prevention

Leverage Social Media, Wireless Technology and


the Cloud Within Product Development
Product innovation has been rising in importance among
P&C and life insurers during the past five years, and Gartner
continues to observe many companies still assessing ways in
which they can launch new products to meet shifting consumer
demands. The Nexus of Forces is creating new product
opportunities as a result of new device usage that can provide
real-time information to the insurer to support pricing, risk
modeling and product needs, as well as using social networking
platforms as a medium for product intelligence, and sales and
cloud computing models to support data procedures.
Examples of how insurers can leverage these devices and
platforms include:
Leveraging telematics technology (including black-box and
in-car technology) to offer usage-based insurance for auto/
motor insurance. Data is sent from the device to the insurer
in real-time, which then can be analyzed to determine cost
of premium, based upon driving behavior ("pay as you
drive"). In the future, insurers will collect more data from
these devices to offer "pay how you drive." This will analyze
driving patterns such as speed, location and other driving risk,
compared to only mileage data, which is used today.

New wireless technology can be used to help understand


property risks, especially in regions with large-scale natural
disasters. Wireless boxes can send information to insurers
about movement of buildings or structural damage, which
would impact insurability and property risks.
Smart home technology can be leveraged to help understand
the risks of a physical dwelling and help homeowners control
costs of insurance in providing this information to their
insurer.
Identifying product opportunity due to real-time data
derived from the device, such as the consumer moved into a
location, or exhibits a behavior which signals a new product
opportunity or that is not currently covered within their
existing product.
Collect and analyze data from social media platforms to
identify individual product needs (e.g., individual customers,
based upon statements or behavior on the platform) and
product trends (e.g., pattern analysis of repeatable issues or
needs of social media users for products related to unique
behaviors or life stages).
Use crowdsourcing for direct feedback from customers to
create and vote on new product ideas. This strategy has
already been used, for example, by small business insurers
wanting customers/prospects to identify the needs of this
consumer group that were not met with traditional products,
so that they could create a new product to fill these gaps.
Enable product innovation through cloud computing.
To fulfill this strategy, many insurers will be increasingly
turning to the cloud as the mechanism to support data
acquisition and even data analysis. Cloud computing will

help companies build out the wireless data platform, can be


an option for hosting the data analysis solution or, possibly,
be the platform for which business process as a service
(BPaaS) providers run their network. This will provide smallto-midsize insurers the opportunity to enter new product
markets, without the substantial upfront investments needed
to support these products (e.g., the policy management and
billing systems), or the data infrastructure to support the
volume required for real-time wireless and M2M processing.
Support more granular pricing analysis by actuaries through
augmenting traditional information with new data sources
to aid in precision. Many companies are leveraging cloud
computing to assist with processing power, and avoiding
runtime issues when data sources grow larger than what
traditional actuarial systems can handle.

Deploy New Data, Improved Models and


Modern Fraud Technologies to Strengthen Fraud
Management
P&C and life insurers should embrace new forms and
techniques for data management in areas of fraud and risk
management. Innovative insurers are building out new strategies
targeted at reducing fraud and losses through a combination of
enhanced data, new fraud detection technologies and improved
process management (including case management capabilities
to support fraud investigation; for more information on fraud,
see "Insurers Must Become More Aggressive at Addressing
Underwriting and Claims Fraud"). This can be applied to
underwriting and claims fraud.

Improving the accuracy of fraud detection through improved


analytical capabilities, often through the use of modern fraud
detection solutions. These solutions support analysis of
structured and unstructured data, provide advanced analytics
procedures (including predictive modeling and anomaly
detection) and help to identify fraud rings through the analysis
of repeatable trends via social network analysis.
Real-time data analysis at point of data entry through the use
of predictive modeling and modern fraud detection solutions
that operate in real-time versus batch. For underwriting fraud,
this would be combined with e-applications, with intelligence
built in to validate the data being entered and flowing through
the application (e.g., back/forward movement and data field
changes).

GPS-empowered data checks against entered data, or to


supplement user input. For example, using GPS to determine
where the user is filling out a first notice of loss (FNOL)
application on a mobile device to compare against the accident
report.
Pattern detection to identify new patterns such as abnormalities
in the data to represent new behavior of fraudsters to help with
model improvement.
Leveraging social media data for fraud investigation in product
lines such as workers compensation, bodily injury, or disability.
Using this as an information source to help investigate
potentially fraudulent cases and provide input for litigation.
Performing social network analysis to identify fraud rings by
analyzing location, address or individual through assessing
connections, which are not obvious in the data through
traditional BI practices.
Using industry data aggregation services to supplement
internal data to help identify fraud risks and patterns through
the collective power of combined data assets across multiple
insurers in a pooled data service. Often, this is offered in the
cloud by data providers, reducing the lapse time and cost of
using such services (including pay-by-the-use models).
Using modern fraud management applications, which leverage
social network analysis, predictive modeling, business rule
engines and unstructured data analysis, insurers can help
reduce risks in claims and underwriting therefore driving up
profitability and reducing losses.

Provide Real-Time Information and Systems to Key


Decision Makers Throughout the Company
Having real-time insight into performance and notifications
about changes in the data is valuable, but without a way to
respond including changing a business process the value is
diminished. This issue is growing, with the advent of wireless
devices, social platforms and other mechanisms that provide
more data in real-time to the insurance business user.
Furthermore, much of insurance is still based upon critical
decisions that key decision makers will continue to make
throughout the organization. These individuals consist of heads

Bust out fraud: New Strategies for Fraud Prevention l 5

Key ways innovative insurers are leveraging information for


reduced fraud include:

Unstructured data analysis to include adjuster and customer


service representative (CSR) notes, images and social data in
the model and investigation process.

of underwriting, marketing, claims, customer service, sales and


the CFO, for instance. These employees need real-time insight,
but also real-time systems (e.g., those which operate in realtime, are business rules and BPM-based, therefore allowing
the business user to make rule/process changes without IT's
involvement, and those that execute process changes in real
time), which they can quickly and easily go into to change a
workflow, business rule or process all together. For ultimate
success, insurers are combining real-time insight with real-time
systems to allow decision makers the ability to act.

Use New Data and Improved Modeling to Support


Business Process Re-engineering

Examples of how insurers are combining real-time data and


systems for decision workers include:

Examples of how this could be done include:

Collecting information on upcoming changes in weather


patterns (e.g., a hurricane forming off the coast of Florida) to
determine impact on underwriting, and (if needed) changing
underwriting rules in the underwriting/policy system in
real-time to stop all policies being quoted and issued within
a certain region. Rules changes are instantaneous and
immediately implemented, resulting in no new policies being
issued until the rule is overridden (e.g., the storm is over and
the head underwriter releases the hold in the system).

6 l Bust out fraud: New Strategies for Fraud Prevention

Identifying pending risks instantaneously and automating


outbound notifications to customers on how to prevent
losses and prepare for this event. This will help reduce
losses, and provide customers with valuable information to
prepare for pending catastrophes or other events, including
natural disasters or health risks.
Real-time feeds from social media platforms that can be
routed to customer service and claims, including notification
of complaint, incident (e.g., wreck or loss) or service inquiry.
Real-time visibility into issues that are growing on the social
media channel that CMOs and corporate executives need
to respond to. This would include backlash of a recently
launched media campaign or some negative response to the
corporate image or brand. Immediate insight into the rising
issue will allow companies to respond, as well as show how
to face the issue (e.g., cancelling the campaign).
Analyzing social media for repeatable service issues,
including claims problems, process bottlenecks and call
center performance. Many insurers are using this feedback,
for example, to assess the effectiveness of the call center and
provide input into training.

In addition to assisting in decisioning, real-time information


is being analyzed and applied to automate next action or
outcomes therefore supporting process improvements and
automation. In these cases, information will allow an insurer
to radically change the business processes and reduce manual
steps (and those that were typically considered fundamental).
The end result is a more consistent, faster, accurate and lowercost process.

Enabling the underwriting of life insurance policies,


without a medical exam. Life insurers are slowly adopting
predictive underwriting technologies and new sources of
data (including pharma) to assess risk, using new models
and data sources. This results in quicker underwriting and
elimination of the step of human medical examination.
Increasing auto adjudication of claims in P&C insurance.
This is already commonplace for simple claims, such as
glass repair or low-cost risks in personal lines. P&C insurers
are increasingly assessing how this can be applied to higher
cost and more complex claims, when risk is low and cost of
claims processing is high.
Real-time product offers on the website, based upon either
website analytics (i.e., movement on the site as a user visits
pages on life events and clickstream analysis) or through
the use of gamification technologies, where customers go
through a series of exercises to determine best product fit.
Products or product bundles can be combined on demand,
real-time marketing messages displayed on the user's
screen or outbound emails generated can be tailored to that
individual's unique needs and personalized, based upon
any customer information you have on that individual.
Using personality profiling to match call center CSRs, with
prospects/customers in order to promote improved sales
rates and customer-service quality.

Source: FICO

Uncovering More Fraudulent Health Care Providers with


FICO Identity Resolution Engine
Many insurance payers realize how valuable Identity

Now, in addition to determining whether a claim appears to be

Resolution and Link Analysis technology can be in

fraudulent using analytic models and rules technology, insurers

supporting detection of organized crime, as well as

can determine whether a claimants personal or transactional

opportunistic fraudulent providers. But they also know how

data appears to be suspicious, and whether that person is

difficult it is to implement on proprietary platforms. Now,

linked with additional people who may also be suspected of

with FICO Identity Resolution Engine as a component of

involvement in a fraud ring or fraud activity. Applicable in reactive

FICO Insurance Fraud Manager, health care insurers can

investigations to incoming claims, or in proactive mode to

immediately access the industrys most innovative entity

predetermine likely perpetrators, payers can use the solutions

data matching technology to reduce losses with a more

identity resolution and linking technology to search across a

holistic view into criminal activity and networks.

variety of attributes such as locations, service providers,


telephone numbers, names and identifiers (License, NPI, DEA

Every insurer is painfully aware of the double-edged dilemma

Numbers) to uncover hidden relationships behind criminal fraud

caused by claims fraud today. Fueled by the growing sophistication

rings. FICO Identity Resolution Engine differentiates itself from

of criminal rings taking advantage of transaction volume and

other data matching systems with:

multiple communications channels as well as sophisticated


identity deception the industry is experiencing big losses. First,

A federated, cross-database approach to accessing a variety

there are the losses caused directly by fraud. Many insurers

of internal or external data sources, eliminating the need

estimate that between 10 and 20 percent of claims are fraudulent,

to build a data warehouse and move data into a separate

and that they detect or deny less than 20 percent of those

repository.

fraudulent claims. Then there are the losses caused indirectly by


fraud. The mere threat of todays fraud problem challenges the

Advanced and proven technology to automate the matching


and relationship identity process with extremely high

competitive marketplace, slow claims payments or mistakenly

precision and speed.

denied claims will quickly drive customers away, not to mention


generate fast and widespread reputational damage via social

Intelligent Data Access


FICO Identity Resolution Engine gives insurers investigators the

media.

fastest and most comprehensive technology to determine whos


So how best to strike a balance between todays fraud detection

who and who knows whom across disparate and potentially

and claims handling demands? And how to do so within todays

remote data sources. Unlike other vendor solutions, theres no

reality of cost and resource constraints? The answer is with a more

need to develop a separate data warehouse, move data into a

comprehensive, and more streamlined, view into todays fraud

common repository, and cleanse and normalize the data. Instead,

perpetrations, and in particular with an analysis of the perpetrators,

with FICO Identity Resolution Engine, investigators look at data

as well as the claims themselves As part of its FICO Claims Fraud

in the original location and source format using a seamless

Solution, FICO is helping insurers worldwide efficiently detect more

approach to understanding matches, relationships and degrees

fraud with FICO Identity Resolution Engine, combining federated

of separation. Its easy to leverage the value of any internal or

data search capabilities, identity resolution algorithms, link analysis

external data sources, without the exorbitant costs, time delays

technology, and visualization tools.

and resource drain required by other solutions.

Bust out fraud: New Strategies for Fraud Prevention l 7

speed and efficiency of many firms claims handling. In todays

8 l Bust out fraud: New Strategies for Fraud Prevention

Source: FICO

FICO Identity Resolution Engine gives investigators access to

The forensic value of data is not jeopardized. Many data

multiple data sources at once. Rather than logging on and off

matching systems discard valuable forensic data as part

of each data source in succession for example, individually

of the data cleansing process. For example, if an insurer

searching separate data sources on customers, agents/

determines that a John Doe is an alias and the correct name

employees, claims, negative data watch lists or external third-

is Jon Doe, many systems will automatically discard all John

party databases FICO Identity Resolution Engine accesses all

Doe references after the determination is made, thereby

data sources simultaneously. This enables investigators to triage

diminishing the forensic value of data searches. Unlike other

cases in minutes, or seconds, rather than days or weeks, using

data matching options, however, FICO Identity Resolution

FICOs case manager.

Engine retains all of the correct information so theres no


rework when the case gets turned over to litigation.

In addition to cost, time and resource savings, insurers realize


other benefits from FICOs federated data access approach:
Avoid privacy issues. By not moving data from various

How It Works: Four Core Functions


FICO Identity Resolution Engine provides four core functions
for insurers: Cross Database Identity Resolution, Link Analysis,

sources into a central repository, insurers avoid the possibility

Real Time Visualization and Red Flag Alerts. In just minutes or

of commingling sensitive data. They also eliminate the risk

seconds, the technology helps investigators:

of being responsible for making sensitive data public via


database attacks or unintentional distribution of data.

Determine that an individual is using multiple, various


versions of personal attribute information an indication of a
fraud perpetrator.

Uncover links between disparate individuals sharing the same

used in a proactive search, the technologys identity resolution

personal attribute information an indication of a possible

engine will compare attributes of the policyholder with other

fraud ring.

databases such as an internal Special Investigation Unit (SIU)


blacklist, other internal databases and external databases. The

Visually analyze matches and relationships on-screen with

technology analyzes personal attributes such as name, street

the FICO case manager or other third party software.

address, city/state/zip, social security number, date of birth,


telephone contact or employer across databases to identify

Receive red flag alerts of data matches when transactions


occur.

likely matches. Unlike other data matching technology, the


FICO system also scores the match in terms of its likelihood of

Cross Database Identity Resolution gives insurers a method

representing the same person.

to develop identity similarities with the systems federated,

Social Link Discovery produces connections between

single search functionality. The identity resolution functionality

suspicious claimants and other individuals. Once a claimant

intelligently searches across disparate databases for variations

has been deemed suspicious, investigators can then fi nd

in spelling, addresses and formats, and determines matches

relationships between that individual and others claimants, but

using more than 50 algorithms. When a claim is fi led, or when

also third-party individuals such as the insurers employees or

Bust out fraud: New Strategies for Fraud Prevention l 9

Source: FICO

business professionals that might stand to gain from a paid claim.

Loss. In some cases, where a relationship match is displayed in

The technology enables investigators to uncover non-obvious

another business area for example, an auto claims investigator

relationships by exploring attributes in additional databases. For

sees that a match has been uncovered in a homeowner policy

example, attributes, such as a phone number, from the suspicious

database the investigator can alert the companys other line of

claimant may be found to match attributes of an individual in

business area.

the insurers agent/employee database, suggesting collusion.


Investigators can then determine if that employees attributes
match attributes of individuals in other databases, suggesting a
ring. FICO Identity Resolution Engine also opens the door to the
potential of data within social networks such as Facebook and
Twitter, if the insurer has access to that data.
Real Time Visualization gives investigators an on-screen graphic
display of the matches that it has determined as suspicious. Its
icons identify the degrees of separation between the claimant, the
similar claimant identities found in various databases, and other

10 l Bust out fraud: New Strategies for Fraud Prevention

individuals that the claimant is connected to by way of shared

For Reactive Investigations and Proactive Fraud


Detection
Insurers can apply FICO Identity Resolution Engine in reactive
investigations as a regular part of their claims review process,
or in a proactive approach to identifying networks. In reactive
investigations, the technology is applied following a FICO claims
fraud score identifying an incoming claim as suspicious of fraud.
As shown in Figure 3, the suspicious claims policyholder is now a
suspect. To determine if the policyholder should be suspected of
criminal involvement, investigators use FICO Identity Resolution
Engine to perform targeted searches across various internal

attributes.

or external databases looking for shared personal attribute

Red Flag Alerts automatically display suspicious activity directly to

3 also shows how the technology can be used in proactive

the investigator as transactions occur such as at First Notice of

investigations, searching for suspects that could trigger alerts to

information with other suspects or known criminals. Figure

Source: FICO

future incoming claims. Investigators can perform broad based

an Identity Resolution Engine search; flexible business rules

searches of various individuals to find suspicious connections

management to manage defined actions based on corporate

based on shared personal attributes. FICO analytics can then

parameters; case management capabilities to support workflow;

determine and prioritize the strength of the connections to identify

and professional services to tie it all together.

new suspects.

Find Out More

A Critical Component of an Integrated Solution

Learn how your company can benefit from FICOs advanced

FICO Identity Resolution Engine is a critical component of

solutions to fight insurance claims fraud.

the comprehensive FICO Claims Fraud Solution, integrating


industry-leading technologies including: sophisticated analytics

Contact us at info@fico.com.

to detect potential fraud and provide a logical starting point for

Bust out fraud: New Strategies for Fraud Prevention l 11

About FICO
FICO (NYSE:FICO) delivers superior predictive analytics
solutions that drive smarter decisions. The companys
groundbreaking use of mathematics to predict consumer behavior
has transformed entire industries and revolutionized the way
risk is managed and products are marketed. FICOs innovative
solutions include the FICO Score the standard measure of
consumer credit risk in the United States along with industryleading solutions for managing credit accounts, identifying
and minimizing the impact of fraud, and customizing consumer
offers with pinpoint accuracy. Most of the worlds top banks, as
well as leading insurers, retailers, pharmaceutical companies
and government agencies rely on FICO solutions to accelerate
growth, control risk, boost profits and meet regulatory and
competitive demands.
Big Data analytics will revolutionize how products are developed
and distributed to how organizations communicate with
customers. Advances in technology have created challenges, but
also opportunities to increase sales and profit. FICO is helping
the worlds largest marketing organizations succeed by finding
actionable customer insights within massive amounts of data and
making high-volume decisions more accurate, predictable and

12 l Bust out fraud: New Strategies for Fraud Prevention

profitable at every turn.

Building a world class experience is an evolution, not a


revolution, and FICO analytic tools and applications deliver ROI
at every stage of maturity.
Learn more at www.fico.com/retail. FICO: Make every decision
count.