{"id":1335,"date":"2016-02-12T18:27:00","date_gmt":"2016-02-12T18:27:00","guid":{"rendered":"https:\/\/tst418075918.wordpress.com\/2016\/02\/12\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/"},"modified":"2016-02-12T18:27:00","modified_gmt":"2016-02-12T18:27:00","slug":"fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader","status":"publish","type":"post","link":"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/","title":{"rendered":"Fraud and errors are lumpy and that&#039;s a good thing&#8230;if you&#039;re an anti-fraud leader"},"content":{"rendered":"<p>We&#8217;ve all heard the narrative: &#8220;fraud constitutes from 15 to 20 percent of auto insurance premiums and up front underwriting fraud from inaccurate information on applications averages almost 10 points of that&#8221;. It&#8217;s a big, complex problem which is why we at VeracityID have developed a solution that can better identify and manage it.<\/p>\n<p>But while the estimates of fraud incidence are probably reasonably accurate, they really don&#8217;t reflect the true nature of the problem. Because when actuaries calculate loss prevalence for rating tables they are calculating them based on the total loss (including unidentified fraud and errors) for each granular piece of the market. \u00a0And there is reason to believe that honesty and competence and therefore the prevalence of fraud and errors vary widely by sex, age, education, income level, geography, channel and so on. Thus there are parts of the market that likely have very little fraud in them and other parts where fraud could be 30 to 40 percent of total premiums &#8211; huge pools of fraud. This creates an incredible opportunity for those who can identify even a fraction of the fraudulent or inaccurate information up front at a granular level.<\/p>\n<p>Here are a few examples where this could be the case. I&#8217;m sure you can think of more.<\/p>\n<ul>\n<li>How much more prevalent are fraud and errors in lower income, inner city neighborhoods? What proportion of their &#8216;sky high&#8217; losses and premiums are fraud and error related? If it&#8217;s much higher that average, an effective ongoing fraud identification and mitigation program would give a carrier the opportunity to grow rapidly in these communities, helping lower income consumers while getting credit for being a &#8220;Social Justice&#8221; Insurer.<\/li>\n<li>How much more prevalent is fraud via aggregators? What if you could score aggregators by not only your yield but by your fraud-clean yield? \u00a0How would that change the way you reward them? How would that change their business model towards you? The same is true of agents. How can you train your channel to send\u00a0<i>you<\/i>\u00a0the &#8216;good stuff&#8217; because you can identify a larger share of the &#8216;bad stuff&#8217;?<\/li>\n<li>How much more prevalent is fraud via the direct channel? \u00a0What predictive indicator of web behavior are correlated with inaccurate or fraudulent information submission? \u00a0Time? Web v. Mobile Web? Browser? Time spent in session? Commercial, home or school web addresses? \u00a0By wireless carrier? \u00a0Identifying defects and their costs allow you to continually deepen your segmentation, allowing finer and finer pricing offers.<\/li>\n<\/ul>\n<p>There&#8217;s even more: \u00a0the greater the variation between the incidence of fraud and other defects from one granular segment to another &#8211; the greater the opportunity for early entrants to create huge value. \u00a0Because the concentration of fraud means there&#8217;s a concentration of value to be mined. \u00a0And that means that proportionately small reductions in fraud and error incidence can lead to huge pricing and profitability advantages. \u00a0For the early mover it radically increases the upside of pursuing a focused, ongoing fraud identification and mitigation strategy like the the one that we deliver via our idFusion Auto Insurance solution.<\/p>\n<div><\/div>\n<div>So fraud is likely to be concentrated in huge &#8216;pools&#8217; like giant oilfields. \u00a0The &#8216;wildcatters&#8217; who to develop the ability to find and exploit them first could reap Texas size share and profit gains. Yee-haw.<\/div>\n","protected":false},"excerpt":{"rendered":"<p>We&#8217;ve all heard the narrative: &#8220;fraud constitutes from 15 to 20 percent of auto insurance premiums and up front underwriting fraud from [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-1335","post","type-post","status-publish","format-standard","hentry","category-blog"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fraud and errors are lumpy and that&#039;s a good thing...if you&#039;re an anti-fraud leader - VeracityID<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fraud and errors are lumpy and that&#039;s a good thing...if you&#039;re an anti-fraud leader - VeracityID\" \/>\n<meta property=\"og:description\" content=\"We&#8217;ve all heard the narrative: &#8220;fraud constitutes from 15 to 20 percent of auto insurance premiums and up front underwriting fraud from [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/\" \/>\n<meta property=\"og:site_name\" content=\"VeracityID\" \/>\n<meta property=\"article:published_time\" content=\"2016-02-12T18:27:00+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/\",\"url\":\"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/\",\"name\":\"Fraud and errors are lumpy and that&#039;s a good thing...if you&#039;re an anti-fraud leader - VeracityID\",\"isPartOf\":{\"@id\":\"https:\/\/test.veracityid.com\/new\/#website\"},\"datePublished\":\"2016-02-12T18:27:00+00:00\",\"dateModified\":\"2016-02-12T18:27:00+00:00\",\"author\":{\"@id\":\"https:\/\/test.veracityid.com\/new\/#\/schema\/person\/0d214ad9dd827724c3e8f895052d644c\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/test.veracityid.com\/new\/#website\",\"url\":\"https:\/\/test.veracityid.com\/new\/\",\"name\":\"VeracityID\",\"description\":\"Automated Risk Selection and CX Solutions designed to benefit your bottom line today.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/test.veracityid.com\/new\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/test.veracityid.com\/new\/#\/schema\/person\/0d214ad9dd827724c3e8f895052d644c\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/test.veracityid.com\/new\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f938dea3515e09ba0408e26ace2aa58e6e2f0d74759e896ee212ff28af5bd6b1?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f938dea3515e09ba0408e26ace2aa58e6e2f0d74759e896ee212ff28af5bd6b1?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"https:\/\/veracityid.com\/new\"],\"url\":\"https:\/\/test.veracityid.com\/new\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Fraud and errors are lumpy and that&#039;s a good thing...if you&#039;re an anti-fraud leader - VeracityID","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/","og_locale":"en_US","og_type":"article","og_title":"Fraud and errors are lumpy and that&#039;s a good thing...if you&#039;re an anti-fraud leader - VeracityID","og_description":"We&#8217;ve all heard the narrative: &#8220;fraud constitutes from 15 to 20 percent of auto insurance premiums and up front underwriting fraud from [&hellip;]","og_url":"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/","og_site_name":"VeracityID","article_published_time":"2016-02-12T18:27:00+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/","url":"https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/","name":"Fraud and errors are lumpy and that&#039;s a good thing...if you&#039;re an anti-fraud leader - VeracityID","isPartOf":{"@id":"https:\/\/test.veracityid.com\/new\/#website"},"datePublished":"2016-02-12T18:27:00+00:00","dateModified":"2016-02-12T18:27:00+00:00","author":{"@id":"https:\/\/test.veracityid.com\/new\/#\/schema\/person\/0d214ad9dd827724c3e8f895052d644c"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/test.veracityid.com\/new\/fraud-and-errors-are-lumpy-and-thats-a-good-thing-if-youre-an-anti-fraud-leader\/"]}]},{"@type":"WebSite","@id":"https:\/\/test.veracityid.com\/new\/#website","url":"https:\/\/test.veracityid.com\/new\/","name":"VeracityID","description":"Automated Risk Selection and CX Solutions designed to benefit your bottom line today.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/test.veracityid.com\/new\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/test.veracityid.com\/new\/#\/schema\/person\/0d214ad9dd827724c3e8f895052d644c","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/test.veracityid.com\/new\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/f938dea3515e09ba0408e26ace2aa58e6e2f0d74759e896ee212ff28af5bd6b1?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f938dea3515e09ba0408e26ace2aa58e6e2f0d74759e896ee212ff28af5bd6b1?s=96&d=mm&r=g","caption":"admin"},"sameAs":["https:\/\/veracityid.com\/new"],"url":"https:\/\/test.veracityid.com\/new\/author\/admin\/"}]}},"_links":{"self":[{"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/posts\/1335","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/comments?post=1335"}],"version-history":[{"count":0,"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/posts\/1335\/revisions"}],"wp:attachment":[{"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/media?parent=1335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/categories?post=1335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/test.veracityid.com\/new\/wp-json\/wp\/v2\/tags?post=1335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}