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By Richard P. Boehning
Insurance fraud is an annual $20-billion-dollar scourge that bedevils the U.S. property/casualty industry. Insurance fraud is not a victimless crime that affects insurers alone. Businesses and consumers alike pay the price for insurance fraud through higher policy deductibles, steeper premiums, and fewer choices.
Genesis of ISO ClaimSearch
As part of a major industry-wide campaign to curb fraud, Insurance Services Office, Inc. (ISO) committed to creating the industry’s first true all-claims database in 1997. ISO has nearly completed the task by building that all-claims system – ISO ClaimSearchSM.
The path to the ISO ClaimSearch system’s creation began with ISO’s acquisition of the American Insurance Service Group and its personal-injury and property-loss claims databases in 1997. The following year, ISO acquired the National Insurance Crime Bureau’s vehicle-claims databases. Together, the three complementary claims databases – all now residing in ISO’s state-of-the-art data center – form the foundation of the ISO ClaimSearch system.
In all, ISO systems engineers transferred information on more than 96 million claims, rewrote hundreds of programs, and reconfigured telecommunications networks that link more than 20,000 customer sites. Vehicle-information users alone will save more than $7 million by year-end with the transition to the ISO ClaimSearch system from the previous separately maintained database, even as ISO has invested significant sums in integrating the databases and developing useful, new system features. This year ISO is also refining the focus of the ISO ClaimSearch system – from fighting fraud one claim and one company at a time to creating a proactive fraud-detection capability that provides more and better information to fight fraud. Over the course of the past year, ISO has made significant progress in developing the all-claims database system. Early last year, ISO simplified claims reporting by enabling insurers to use a single software package to report any type of claim – bodily injury, property, and vehicle – providing companies with a single interface for data reporting from a PC-based platform.
Three-In-One Search Tool
Another new ISO ClaimSearch capability rolled out early last year enables fraud investigators to simultaneously search across multiple lines of insurance to expose suspicious claims patterns.
ISO has expanded the capability of the online search tool to provide claims investigators fast, efficient access to information on property, casualty and auto claims. Investigators can search across 140 million injury, property and auto claims by insured name, address, vehicle identification number, Social Security Number, Tax ID number, medical license, phone number, driver’s license, license plate – by any data element in the system – all from a single screen. This enhancement alone can greatly improve investigators’ productivity by eliminating duplicate searches previously necessary to scour through multiple databases.
Investigators can: *Match addresses against mail-drop information; * Verify Social Security Numbers, including checks against the Death Master File; * Verify Tax ID numbers, noting city of issuance; *Obtain “more match” messages for casualty and property claims, as well as for vehicle information that point to data found elsewhere; and * Combine searches on names and relationships in any role, and search for lawyers and doctors, claimants and witnesses, or insureds and mortgagees who may regularly work in collusion with one another.
Other enhancements in the ISO ClaimSearch system will improve the quality of data and searches. Since June, ISO has added important new enhancements to standardize addresses, improve name searching and eliminate duplicate records.
An advanced address standardization package now cleans address information and assigns correct postal addresses as claims are filed. The system automatically assigns the correct postal address – but does not replace the original address information. The cleaned address is filed in the database and used for searching. For example, an address reported as “Sixth Avenue” in New York City is automatically corrected to “Avenue of the Americas.”
Improved Name Searching
ISO has added refinements to its similarity-searching processes. The refinements reduce the amount of “noise” on match results and, in some cases, broaden the results of searches. The new process improves the overall quality of the matches by “scoring” all matches according to how “close” the matches are, and then screening the data brought back through searches by selecting those with the highest score.
The system recognizes gender. For example, searching on the first name “Michael” should no longer bring back “Michelle” or other similar-sounding female first names. On the other hand, the system will continue to match all true variants of search names. So, when an investigator queries on “Michael,” the system also checks for “Mike” and “Mickey.”
Elimination of Duplicate Records
The property-loss information and vehicle databases have already been physically integrated in the ISO ClaimSearch system. As a result, ISO has streamlined insurance investigators’ query results by removing duplicate property records. This reduces the time investigators have to spend examining those results. In the coming months, ISO will complete the physical integration of casualty claims into the system, making it possible to streamline searches involving casualty claims.
ISO has undertaken an intense effort to broaden insurer access to the industry’s most critical claims data through a two-step expansion program. Phase I: Backfilling the ISO ClaimSearch database with previously unreported property claims and auto physical-damage data. ISO has requested data that contributors to the ISO ClaimSearch system provide this information, using reporting procedures already in place for ease and simplicity. This is in addition to their daily transmissions of data to the ISO ClaimSearch system. Phase II: Reporting expanded data elements for current and new lines of business. In the past, users of various systems had to report claims information to separate systems maintained by different organizations in separate, proprietary formats, and the output for each system was unique, as well.
Previously, certain auto and physical-damage claims would have been reported to one system while related injury claims were reported to another. It was difficult to get a complete profile of an individual’s claims history. ISO now has a new, streamlined claim-reporting format – the Universal Format – for reporting casualty, property, and vehicle claims to the ISO ClaimSearch system. Under the Universal Format, data elements common to most claim types are collected first, and more line of business-specific information is provided later in the record layout. This enhancement is a step toward better integration of claims information into a single system. The Universal Format will accommodate new outgoing search results. As a claim in any line of business is submitted, the ISO ClaimSearch system will be able to automatically perform “cross-line” searches in all other lines of business and report all claims found across lines of business. For example, a search report resulting from an auto claim report will include the existence of homeowners, workers comp, liability and other claims. The Universal Format will also handle third-party data. For example, public records and other publicly available information, in addition to ISO’s claims information, will be available in search-result output this year.
ISO ClaimSearch and the Internet
ISO is adding full Internet capability to the system. Beginning with investigations queries – but soon expanding to include claim reporting – ISO is making ISO ClaimSearch fully compatible with Internet-based protocols and industry standards, so insurers will be able to report data, receive results, and query the system on the Net.
Launched in November, ISOnet ClaimSearch offers subscribers access to investigation queries and to a VIN (Vehicle Identification Numbers) decoding capability.Subscribers throughout the system are now able to conduct queries through their standard Internet browser. All access is highly secure and available to authorized users only, ensuring top-notch privacy protection for all ISO ClaimSearch data.
Proactive Fraud Detection
In the summer of 1999, ISO entered into a strategic alliance with a leading visual-analysis software company, Alta Analytics, to provide ISO ClaimSearch subscribers with proactive fraud-detection tools. The alliance offers ISO’s subscribers tools to broaden their analyses of claims and fraud indicators from their own data to industrywide data.
Alta’s NetMap for Claims software can alert claims professionals to many red-flag items, such as parties linked to multiple addresses, Social Security addresses, telephone numbers, vehicles, and claims. By using sophisticated algorithms, the software reveals direct and indirect relationships that were previously hidden in layers of information and may have escaped detection during analyses involving traditional labor-intensive methods.
A new seamless interface, or gateway, between the ISO ClaimSearch system and the NetMap software is now available. The gateway will take data from the ISO ClaimSearch system for analyses and visualization by the NetMap software running on a customer’s system. Another new fraud-detection tool, expected to be released early this year, is ISO ViewLink Manager*, a web-enabled desktop visualizer that will allow investigators to pull together the results of their queries to the ISO ClaimSearch system into their own databases for analysis. ISO is also evaluating other proactive fraud-detection tools and capabilities for automatic scoring and flagging of incoming claims.
ISO’s Privacy and Security Policy
Given the ISO ClaimSearch system’s comprehensiveness and power, insurers and other data contributors have legitimate concerns about who has access to the sensitive information they provide andhow ISO guarantees security. ISO’s Privacy and Security Policy for the ISO ClaimSearch addresses such concerns. The ISO policy describes authorized access and use of system information for various users, including insurers; law-enforcement agents, criminal-justice personnel, and regulatory officials; and all other customers. The Privacy and Security Policy also outlines security requirements for users of ISO ClaimSearch data. The policy is specifically designed to comply with federal and state privacy legislation, as well as the National Association of Insurance Commissioners’ Insurance Information and Privacy Protection Model Act.
The ISO ClaimSearch system is poised to tighten the vise on insurance scam artists this year, with a single, integrated database of claims of all types – bodily injury, property loss and vehicle theft. Insurers and law-enforcement personnel now have a potent weapon in their hands to send a clear, unambiguous message to insurance cheats, no matter how sophisticated their scams: you can run, but you can’t hide.
Richard P. Boehning is with the American Insurance Service Group (AISG) unit of Insurance Services Office, Inc. (ISO), 7 World Trade Center, New York, NY 10048.
© Copyright 1999 Alikim Media