Insurance fraud can range from an exaggerated injury claim to large crime syndicates stealing hundreds of vehicles, such as the recent Project MYRA case. Yet, for crimes of all sizes, emerging technology is providing new opportunities and ways to avoid detection.
Industries that are targeted by high-tech criminals must also stay on the cutting edge to protect themselves. Criminals are harnessing technology to commit insurance fraud, which is estimated to cost Canadians $2 to 3 billion annually. The insurance industry is fighting back with its own innovations to help detect fraud in both small crimes of opportunity and the more complex organized crime rings.
Équité, a national organization with a goal to eradicate insurance fraud and crime, is leading this effort with advanced analytics and an expert team of fraud investigators who are ready to stay one-step ahead of the criminals.
Angel Yau-Vandenburg, Chief Data & Technology Officer at Équité, leads the data and technology team using analytics to detect fraud through artificial intelligence (AI) and machine learning (ML). In March 2022, Équité announced its partnership with Shift Technology to build a national fraud detection system using AI, a first for property and casualty (P&C) insurers. The organizations are working together to create the first Canadian and consortium-based approach using AI to detect and prevent insurance fraud. In an ecosystem where technology and fraud are evolving faster than ever, Shift’s systems will open the door to faster, better identification of criminals and criminal activities.
The solution will be used by both Équité and its members not only for fraud detection, but to identify criminal activities for the P&C insurance industry across Canada. The AI/ML model will generate and assign a score to assess the fraud risk. Alerts for potentially fraudulent activities will be relayed to Équité’s expert investigators for potential use in their investigations.
Most organizations are using a data driven approach for fraud detection. As exciting as new advances in AI are, Ms. Yau-Vandenburg is a strong believer in the balance of art and science, and acknowledges that investigators and data analytics technology need to work hand-in-hand to combat fraud.
“I enjoy working closely with the investigations team,” says Ms. Yau-Vandenburg, “because they bring additional insights that cannot be identified through data exploration alone. In addition, we also need a team to triage alerts generated from AI/ML models to help distinguish between true positive and false positive trends. The information will also be fed back into the system for the continuous quality improvement of alerts.”
As the team at Équité knows all too well, fraud never stops. Équité continues to evolve with emerging and changing fraud trends to better identify criminal activities by using a combination of leading-edge technology, member collaborations and key industry partnerships.