Fraud measurement survey

Understanding various aspects of insurance fraud

In April 2004, 65 attendees of the Insurance Fraud Management conference in Phoenix participated in a conference session that asked them to complete a survey on their companies practices involving how they measure anti-fraud activities involving case referrals, fraud savings and performance evaluations of investigators. The conference session was led by Dennis Toomey of Liberty Mutual, Frank Sztuk of Allmerica Insurance and Dennis Jay of the Coalition Against Insurance Fraud. Below are the results of the survey. Additional analysis of the survey will be available at a later date.

Referrals

1. Do you track the percentage of claims that are referred to SIU?

Yes
86%
No
14%


If yes, what was your referral rate for 2003?

Less than 1%
25%
1% to 3%
39%
More than 3%, less than 5%
23%
Greater than 5%
13%

2. How useful would it be to you to compare your referral rate to an industry average?

Very useful
57%
Somewhat useful
40%
Not useful at all
3%

3. Would you and your company be willing to share your rates of referral by line of business with the Coalition Against Insurance Fraud on a confidential basis to help develop industry averages?

Yes
69%
No
2%
Maybe
28%

Savings

4. Does your company track the amount of savings incurred as a result of anti-fraud activities?

Yes
80%
No
20%


If so . . .

5. What factors are used to calculate savings?

Total claims payout
25 (number of responses)
Reserves
36
Actual potential payout
33
Compromises
30
Other
12

6. Does any non-SIU department within your company audit or assist in determining the savings amount?

Yes
48%
No
52%

7. Do you believe that the calculated total is an accurate reflection of real savings your SIU brings to your company?

Yes
10%
No
90%

8. Do you feel that the aggregate total of savings your company reports to state insurance departments accurately reflects your total anti-fraud efforts?

Yes
3%
No
97%

Performance evaluation

9. What are the top three factors that your company uses to measure the performance of individual investigators?

Quality & accuracy of investigations
59 (number of responses)
Number of investigations
38
Closing ratio
24
Average days open
18
Recovered premium
1
Averaged paid
4
Assists
7
Training
16
Savings
11
Other
9


10. Does your performance system take into consideration complex cases vs. simple ones?

Yes
56%
No
44%

11. In a case where an urban medical provider submits 100 questionable claims, does your performance system count this as:

One case
29%
100 cases
47%
Other
24%