SOFTWARE has saved short-term insurer Santam $2,4m in fraudulent claims, according to the technology's supplier IBM.
IBM said yesterday its business analytics software had enhanced Santam's fraud detection capabilities and had also enabled faster payouts for legitimate claims. In developing markets including SA, about R3bn is siphoned off by criminals every year, according to IBM.
Industry experts said that last year fraudulent claims in SA had totalled more than R100m, and this amount only includes claims identified as fraudulent.
Short-term insurers have dealt with policyholders who continue to beat the system by making false reports of car thefts to claim insurance. Business owners have been known to burn down their premises to claim insurance benefits.
Anesh Govender, the head of finance, reporting and salvage at Santam, said IBM's solution "has delivered a full return on investment and also helped uncover a motor insurance fraud syndicate in less than 30 days after the system went live".
According to IBM, Santam's claims division developed a new operating model for processing claims, depending on varying risk levels.
"IBM's predictive analytics software has enabled Santam to automatically assess if there is any fraud risk associated with incoming claims and allows the insurer to distribute claims to the appropriate processing channel for immediate settlement or further investigation, which optimises operational efficiency."
Rich Holada, vice-president of predictive analytics at IBM, said Santam "provides an excellent example of how insurers can put analytics into action in order to reduce risk, while improving the customer experience by settling claims faster".