Fraud is a very serious issue for insurers, affecting an estimated 10% of all claims and resulting in global losses of several hundred billion dollars per year across Health and Property & Casualty (P&C) insurance. It also impacts the broader public, as higher fraud rates typically mean higher insurance premiums.
However, only about 15% of fraudulent claims are detected today. This rate is low because the detection process is manual and cannot effectively keep up with the vast and growing number of claims. With 15 billion P&C and Healthcare claims made per year globally, insurance claim handlers have to first decide which to review and then try to understand whether these claims are actually fraudulent. Current detection methods are either not automated or expensive and yield very limited results.
To address the issue, Shift Technology has developed a cost-effective decision support platform to automate the detection process and make claim handlers as efficient as possible. It enables them to better prioritise their inquiries and focus on investigating aspects of a claim that matter. Big data analytics and machine learning are used within a business-specific context to:
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Highlight suspicious claims
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Explain what type of fraud is most likely involved, such as network fraud (a form of organised crime)
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Identify which aspects of the case are worth investigating
The system improves over time through additional data and user feedback. The result is a hit rate, the percentage of highlighted claims that claim handlers agree look suspicious, of 75%, compared to the industry average of 30-35%.
Shift Technology launched its platform in 2014 and is headquartered in Paris. The company has processed more than 50M claims to date for P&C insurers across Europe, Asia and the Americas. As a software-as-a-service platform, the solution can be deployed within a short period of time, avoiding the lengthy and expensive integrations associated with on-premise solutions.
Jeremy Jawish, CEO and co-founder of Shift Technology, says: “By focusing on the specific requirements of the insurance industry, we have been able to build a unique platform that helps the industry fight fraud more efficiently. Its success has led to a growing number of clients worldwide. When using Shift, companies meet their savings expectations in a few months. This investment will help us to continue innovating in the claim sector and strengthening our global presence.”
Today’s investment follows an earlier seed funding of $1.8 million in December 2014. Shift Technology will use the investment to bolster their technical team, further refine their product offering, build out a sales and marketing department and consolidate their activities worldwide.
As part of the investment, Accel’s Sonali de Rycker will be joining the board. De Rycker says: “By harnessing state-of-the-art technology and a deep understanding of the insurance industry, Shift Technology has developed a truly differentiated solution for an industry that still relies on time intensive and expensive processes. The customer traction to date has been very exciting, and we look forward to partnering with the team as they continue to revolutionise insurance fraud detection.”
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