The rising cost of healthcare and increasing sophistication of fraudulent activities are placing significant strain on the sustainability of group life and health insurance plans. To address this challenge, the Canadian insurance industry is bolstering its collaborative efforts to detect and prevent fraud, leveraging the power of data analytics and artificial intelligence.
In late May, industry representatives highlighted the expansion of a crucial data pooling program designed to identify fraudulent patterns within the group insurance sector. Initially launched in 2021,this initiative gathers anonymized data from multiple insurers to pinpoint emerging trends and potential fraud schemes. This proactive approach allows participating companies to refine their own fraud prevention strategies and respond more effectively to suspicious claims.
Currently, over 70% of Canadians rely on group insurance plans for their health and dental coverage, making this sector notably vulnerable to abuse. The program aims to safeguard these benefits for legitimate claimants and maintain the long-term viability of these essential plans. According to a recent report by the Insurance Bureau of Canada, insurance fraud costs Canadian consumers an estimated $2 billion annually.
The program’s effectiveness stems from its reliance on cutting-edge technology. Shift Technology, a global leader in data science and AI solutions for the insurance industry, serves as the technological partner for this initiative. Their AI and machine learning algorithms analyze claims data, identifying anomalies and flagging perhaps fraudulent activities. This isn’t simply about catching individual cases; it’s about uncovering broader industry-wide schemes. Currently, twenty insurers are actively participating, sharing data related to service provider claims – for example, instances of billing for services not rendered or the inappropriate use of benefits by ineligible individuals. Importantly, the system is designed to protect privacy; no personal facts about insured individuals is shared.