How Folksam Started Investigating 15-20% More Claim Cases and Prevented Losses
Customer
Folksam
Challenge
Although Folksam’s combined ratio is not under pressure, the company found that 5-10 percent of all claims are possibly fraudulent and Folksam wants to reduce this number.
Solution
FRISS Claims Analytics
Results
Continuously detecting and identifying suspicious claims with straight-through processing,
A delivery of 15-20% more suspicious claim cases to be investigated
Customer
With over 4.5 million customers and around 1 million claims per year to be handled, Folksam is one of the largest insurers in Sweden. Folksam is a mutual company offering a wide variety of insurance, savings and loan products. The insurer has several offices across Sweden, but its headquarters can be found in Stockholm. Folksam takes insurance fraud seriously: a department of about 30 investigators is fully dedicated to the investigation of suspicious cases, which are detected and handed over by the claims department.
Challenge
"Folksam’s combined ratio is not under pressure but we know from studies that possibly 5-10 percent of all claims is fraudulent, and this is a factor we want to reduce”, said Klas Beskow, Head of Investigations.
According to Folksam, this is a big challenge for Folksam and for the insurance business as a whole. Fraudulent cases often comprised the staging of traffic accidents, burglaries, and gold theft. Moreover, Folksam wants to further enhance its image as an honest insurer in Swedish society.
Beskow points out: “We want our customers to feel safe that we are doing our utmost to protect their premiums and their money from being exposed to fraudulent people.” The deal with these challenges, Folksam decided that it needs technical support to be able to effectively identify suspicious cases. Both within the motor, as well as in the property line of business.
For Folksam, customer satisfaction and the pace in which claims are handled are very important and were a great part of the consideration. The company has been working with a self-built case management tool in the past, but this does not fit the requirements any longer. Folksam considered two strategies: building a new homegrown system (in-house developed) or implementing an expert solution from outside. After a market scan and a reference tour visiting multiple insurers throughout Europe, Folksam decided to focus on an expert solution.
Solution
Finally, Folksam chose FRISS as its partner in fraud and risk management, since Folksam acknowledged that FRISS is built and designed for the needs of the insurance business. “FRISS has the most implementations of anti fraud solutions in Europe. This is a very important factor for us as well, since we see that we can benefit from their experience with other insurance companies in Europe.”
Something that also appealed to Folksam is the FRISS® Score, which indicates the risk of fraud. The FRISS® Score is supported by a learning cycle to enable continuous improvement. ‘’FRISS has by far the most implementations of antifraud solutions in Europe. This means that the FRISS platform, over time, will gain more and more knowledge concerning insurance fraud and fraudulent behavior from which Folksam will benefit’’, says Beskow.