Notre Dame Researchers Develop ‘Fraudbuster’ System to Reduce Fraud in Auto Insurance Market
In 2012, fraud cost U.S. auto insurers 7.7 billion dollars in excess payments. Although the rate of fraudulent policies for most insurers was 5 percent, that rate for nonstandard auto insurers – or insurers that underwrite drivers with multiple accidents, prior convictions and state minimum coverage – was significantly higher at 84 percent. Unfortunately, this cost is often passed down to policyholders in the form of increased insurance premiums. To better control these costs, University of Notre Dame researchers at the Interdisciplinary Center for Network Science and Applications (iCeNSA) have developed artificial intelligence algorithms and a system that identifies potential fraudulent risks.
The study, which was published in Big Data, focused on creating a framework dubbed “FraudBuster,” which combats the following challenges: identifying the worst affected segments of the auto insurance market, identifying “actionable” fraud and ensuring compliance with the industry regulations.
Read more here.
June 25, 2018