This post is part of a series sponsored by Early Warning.
The insurance industry is comprised of more than 7,000 companies, which together collect more than $1 trillion each year in premiums. Today’s sophisticated fraudsters are well aware of the money moving within this industry and subsequently have made it a target for their attacks. As the volume of claims insurance companies receive rises, and concurrently, fraud becomes more prevalent, companies must identify ways to know exactly who they are working with and authenticate that a policy holder and account signor are truly one in the same. To accomplish this, many organizations are wisely turning to solutions capable of immediately verifying the policy holders and beneficiaries of every claim.
At Early Warning, we see a variety of fraudulent activities impacting how insurance companies operate. The exploitation of natural disasters is one example of an increasingly common criminal scheme that more organizations are seeking to prevent with enhanced detection tools. When insurance companies send agents to a site to issue payments to victims, it can be difficult in many circumstances for agents and adjusters to verify with certainty that the individuals filing claims for extensive damage to homes, cars and other belongings are in fact the rightful owners. In these instances, it is crucial for agents to have a way to quickly validate policy holders before writing checks or, in today’s era, sending immediate electronic payments.
Take another, increasingly common, scenario insurance companies are working to stop: a check or an electronic payment issued for damage to a policy holder’s vehicle is never dispersed by the policy holder to the auto body shop. Once the insurance company realizes funds never reach the body shop, this situation creates significant headaches for both the insurance company and the bank, requiring many time-consuming steps to reclaim funds or retrieve those sent via ACH. This type of fraud leaves organizations asking themselves what solutions are out there to improve authentication and reduce returns and fraudulent payments.
Early Warning has been answering that question for insurance companies, equipping them with a solution to proactively mitigate fraud while optimizing processes such as ACH enrollment and the collection of one-time or even recurring payments for premiums, deductibles and investments. Our Real-Time Payment Chek® Service with Account Owner Authentication leverages contributed data from financial institutions, providing 95% visibility, to support payment enrollments – check, ACH and wire. This solution is enabling insurance companies to authenticate account ownership, verify the account signor and identify whether the account is open and in good standing – all in real time. The immediacy allows an agent at the site of a hurricane, for instance, to issue fast payments with confidence.
As insurance companies acknowledge the growing threat that fraud now poses, they should also realize that it is possible to arm their businesses with tools to mitigate risk. Whether policyholders make their payments through the mail, online or through an agent, insurance companies must first and foremost have a way to verify that payee information matches bank account data to ensure accounts are open and in good standing. With funds continually being dispersed, the ability to confirm that policyholder and account data align – and that they match up every time – is critical to preventing fraud from continually costing both the organizations and the consumers that these deceptive acts can touch.