New fraud fighting techniques could be driving away policyholders with genuine claims, warned specialist IT consultancy Detica.
Responding to reports that cognitive interviewing techniques can lead to 30% of phone claims being withdrawn, Detica head of insurance Richard Love said: “It's unlikely that the 30% of customers who withdraw claims are all fraudsters: a large number of them probably have genuine claims but feel over pressured by the interrogative style of cognitive testing.
“Using this kind of fraud detection tool does not indicate much trust in customers and, with churn rates as high as 20%, insurance providers can't afford to alienate their good customers.”
He added: “Cognitive testing is just one of the tools that can be used to combat fraudulent claims and it can be very effective.
“Insurers must, however, choose whom they use it on very carefully, not only because they risk losing customers in a highly competitive marketplace, but also because it ‘s an expensive tool.
“By making the most of the customer data they have available, the smart insurer should be able to retain high value, long term customers and save money by targeting those more likely to commit fraud, using an array of combative weapons including cognitive testing.
“Insurers should not, however, get into the habit of using it sporadically and without careful targeting,” he concluded.
