KYC – the gatekeeper against insurance fraud

The insurance industry is increasingly exposed to fraudulent practices and is more vulnerable, susceptible than ever, motivated by insufficient resource allocation for attack prevention and good security, but still less than the banking industry. When customer data is stolen, it also implies fraud.

“The insurance field is composed of more than 7,000 firms that collect over $1 trillion in premiums annually.” (Federal Bureau of Investigation of the US government)

In such a way, authorities worldwide are doing their best to impose a series of sanctions to combat money laundering. As an example, European regulators require insurance companies to comply with appropriate Customer Due Diligence (CDD) measures or in other words Customer Identification Program (CIP) to prevent and protect against fraud. This process/method is vital and underlies the prevention of fraud by the insurance industry, and which is part of the process of KYC (Know Your Customer).

The KYC’s goal and what is it eaten with?

KYC is a fundamental part of any financial, banking, insurance company’s game plan. It’s the process of verifying the identity of a customer in a timely and secure manner, being at the same time part of the Anti-Money Laundering (AML) regulations framework. It takes place before or during a client’s onboarding and authentication, perfectly by electronic identity verification.

KYC’s main goal is understanding better clients and their financial transactions, thereby effectively managing risks. More importantly, used by various companies in many sectors for fraud detection, customer viability testing, or market segmentation purposes. KYC is a way to protect companies and individuals to save money and avoid losses or different fraudulences.

Referring to the modern-day fraud types, among them are the following:

  • Money Laundering;
  • Fake Accounts;
  • Stolen Identities;
  • False Insurance Claims;
  • Application Fraud.

Its policies are an extremely global tool that fights against money laundering, corruption, fraud, financial terror, illegal transactions, and other similar situations. If you do not use this special tool, obtaining information about individuals and legal entities can be time-consuming, and the quality of the data obtained is not guaranteed.

“The whole market for KYC solutions is evaluated at $ 5.6 billion with a yearly increase rate of 16%, with a forecast size of $ 11.8 billion in 2022.” (Office of War Information (OWI))

Insurance Due Diligence

Considering that insurance companies are increasingly neglected by money laundering and other types of fraud, the due diligence comes to the rescue, helping to classify risks, find out their levels and check the details of each client thoroughly.

KYC addresses two main areas of concern:
business’ Customer Identification Program (CIP);
Customer Due Diligence (CDD).

Undertaking due diligence, useful client’s details like names, social security numbers, birthdays, and addresses, and others, the identity of the client is rigorously checked, namely, if s/he is not intricated in corrupt, illegal activity, suspected financial crimes, or money laundering, bribery, continuously monitoring his/her profile by suspicious activities. Fulfilling this customer data collection, the client remains to be protected following GDPR regulations.

In this process, companies also neglect the Anti-Money Laundering (AML) Compliance Program, which helps prevent financial attacks.

Based on this, the AML and KYC platforms simplify the activity of not only the business, but also the client.

Thus, in addition to collecting customer data, the company checks the customer’s level of trust by following the Customer Due Diligence process. Due to the fact that in many cases the initial half-year analysis of the client is not enough, insurance companies constantly monitor, namely, the transactions that they do on the basis of an adequate system of internal control and monitoring, Money Laundering Regulations.

IT and its benefits in preventing insurance fraud

e-KYC is the base of todays’ modern insurance security process and takes the KYC to the next level. A part of this is, the trending comprehensive customer authentication solution, called “Video-Based Identification Process (VBIP)”. Through this, the company receives a real-time audio-video authentication connection or live photos with the help of which the company can continuously monitor all the client’s actions and at the same time easily detect suspicious procedures. Beside this, the location tracking of the client is also mandatory, using Geotagging, which consists of the live investigation of his/her location via Google Maps.

e-KYC simplify digitizes the insurance industry, offering a series of benefits such as:

  • Speed;
  • Accuracy;
  • Cost;
  • Adaptability;
  • API Integration;
  • Analytics, auditing, tracking, and reporting;
  • Customer Experience;
  • Efficiency.

Nevertheless, the solutions of companies developing KYC products are used by businesses, governments, and non-profit organizations around the world. Banks such as Bank of America, Royal Bank of Scotland (fingerprint), Barclays (fingerprint), HSBC (face), Wells Fargo (either voice and face, or vascular) have already successfully used remote identification eyeball) and Citibank (by voice).

What is the benefit for customers? Very simply, the client lifecycle becomes secured, offering long-distance access online activities, all electronically, and is protected against fraud, this is great, isn’t it?

“Already Australia, Brazil, Canada, Europe, India, Mexico, New Zealand, South Africa, and the UK are implementing such methods.” (KYC laws around the world)

Modern and efficient SOLUTION

Today, there are many companies and tools that provide innovative solutions to prevent insurance fraud. But the question is that you need to use one solution, effective and at the same time simple.

“21% of insurance plan to invest in IT in the next two years.”(Coalition Against Insurance Fraud)

DAS Solutions creates custom KYC and identity verification platforms for insurance firms, offering behind-the-scenes protection to clients from various malicious schemes. Thus, your company will increase the productivity and safeguard of your business thanks to a scalable and automated omnichannel solution. If you plan to optimize processes and allow employees to work more efficiently, then the coolest solution is DAS Solutions.

Recap

With advanced technologies and innovative analytics, identity verification, monitoring, and screening, the entire process becomes fast, simple, reliable, and secure. Smart KYC onboarding and monitoring reduce human error where possible and, ultimately, helps insurers prevent fraud while avoiding costly non-compliance penalties.

Contact us today and protect your business with a scalable method and automated way, while saving time, money, and resources. We will be glad to customize the right KYC answer for your company.

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    Top Features of an Effective Claims Management System

    Claims are a critical part of the insurance business. Even if your insurance company is not as big as Axa or Allianz, you need to have an efficient claims management system. Clients’ mindset and expectations are different from what they were 10 years ago. A recent survey called Insurance 2020: The digital prize — taking customer connections to a new level  has brought to light some fascinating facts:

    1. 71% of consumers made an online research before buying an insurance product.
    2. 68% of respondents were willing to download and use an app from their insurer in order to access services.
    3. 50% (!) stated their readiness to additional personal and lifestyle information so they can get the best deal for insurance services.

    Insurance must thus move quickly to become more customer-centric and to improve customer experience. For successful communication, your customers and team members need to have access to an intuitive claims management system. In this post, we’d like to highlight some features that would be welcomed by both your customers and your staff.

    Features of a claims management system appealing to customers:

    • A simple submission process from any device

    Users need to have the possibility to complete a short and simple form using their smartphone or tablet. Claimants’ basic info, such as first name and last name (as well as other contact information) should be  filled in automatically when the customer decides to submit a claim. This should be easy to do since the info is already in the carrier’s database. In addition, the claims process will be easier if customers understand intuitively how to attach photos of receipts or invoices to their claim.

    • Tracking claims progress

    Claimants need to be able to track the status and decision of consultants regarding their claim, further steps they have to take, as well as the final outcome.

    • All documents in customer’s pocket

    When the customer uses their insurer’s app, they need to store their paperwork such as copies of their ID, driving license and policy documents on their application.

    • Online claims payments

    Clients can save a lot of time if the transaction of claims can be done online. It also adds transparency to the process because both the customer and the consultant have access to the final decision of the claim.

    • Simplicity and security

    For fast and easy access one can log in with a PIN code that is easy to remember. Any claims information entered must not be lost until submitted. At the same time all personal data must be secured via encryption. It is also useful if most of your app’s features are available even if the user is offline.

    Your team will thank you for the following claims management system’s features:

    • Reminder function

    This is a useful feature because it enables a consultant to stay on top of the tasks that require a timely response. The reminder feature facilitates the service provided by the insurance company.

    • Handling different types of contracts

    It is preferred that the claims management system can handle various types of standard contracts. Furthermore, as the clients and the consultants might introduce amendments to the conditions of the standard form of contract it is critical that the system is able to deal with changes.

    • Keeping documentation up-to-date

    Some claims are more challenging to prepare because more documentation is required. Thus claims managers need to have a system to help them keep an up-to-date documentation, prepare the claims, and prevent them from losing relevant documents.

    • Extended search capabilities

    The agent needs to have the possibility to search virtually any data within the claim, including claimant, address, policy number, phone number, check number, etc. This function makes searching easier.

    • Centralized database

    If you have several offices across the country it is better to have a centralized database so that the management can have access to the files, templates for claims and any other information. A reporting tool will help them analyze the outcome and status of claims.

    So here we are! Ten features that a claims management system should have to improve your company’s performance. All in all, the app has to address your customers’ and your employee’s needs, which is why it is so important to choose a system with a user-friendly interface that fits well with your specific needs. Contact us and lets custom build it for you business. 

    Moving Forward,
    DAS Solutions Team.

    insurance software solutions

    Core Functions of a Custom Insurance Software System

    In today’s competitive environment, an insurance software system should connect your business to the most advanced technologies and prevent you from staying behind the competition. Moreover, it should be easy to use and maintain, able to withstand all your requirements, and be easily expandable with a modular design so that new functionalities are easy to integrate. Old systems are no longer sufficient as a result of unprecedented volume of operations; consolidation is needed to get businesses more agile.
    Challenges & Issues
    The main two issues of the industry are related to cost savings and compliance with legal regulations. 
    1. Manual processes and the paper-based documents are costly and unwieldy, slow and prone to errors.
    2. In addition, they are hard to manage and difficult to comply with risk management guidelines and directions.
    A custom piece of software can be focused on improving the entire process by:
    • Eliminating paper, redundancy and errors.
    • Hosting and integration of transaction-based or the collaborative processes.
    • Adopting compliance standards across the organization.
    • Shortening workflows.
    The overall benefits of a custom solution:
    • Lower cost of processing the loan.
    • Processing multiple loan files without a proportional increase in staffing.
    • More efficient processes – eliminate duplicates, improve service performance.
    • The person processing the request can access all the files as needed – this means providing an overview of the client – both for data and for documents.
    • The possibility to grow the business without the need for additional storage spaces, which can be costly.
    • Protecting the goods and information in accordance with the storage and maintenance policy on a single platform of the entire content (email, enterprise data, records, photos, etc.), a useful function in audit cases, based on a common model of security.

    Find out more about how an automation can help and grow your specific business, or if you have any other software development questions – just contact us at [email protected] or by filling out the Contact Form.

    Moving Forward,
    DAS Solutions Team. 

    Talking InsurTech with Dr. Moritz Finkelnburg

    This March, specifically on the 13-14th, Goethe Business School (GBS) organizes the Global InsurTech Roadshow in Frankfurt together with InsurTech Asia from Singapore. The roadshow combines pitch-sessions and discussion rounds with international early-stage InsurTechs. One of the main organizers of the event is Dr. Moritz Finkelnburg – Academic Director for Insurance at GBS. Also, he manages the insurance programs as part of the China Executive Education Center. With 20 years of management and board experience in leading insurance companies he is a specialist in sales and non-life-insurance as well as profit-oriented portfolio management. We are thrilled that Dr. Finkelnburg gave us an interview where he shared his insurance industry’s experience, thoughts on innovation and why the Global InsurTech Roadshow is an event that is not to be missed.

    1.  How did the InsureTech eco-system change in the last couple of years?

    The InsurTech era started with tech-oriented small companies, mainly focusing on app and technical service developments. Since 2015, we noticed the market-entry of digital brokers such as Knip or Clark, offering a fresh image, high customer service and easy accessibility. Last year the first digital insurers appeared and will be completed this year. They are offering own products and services to the customers.

    2.  Who is behind the Global InsurTech Roadshow (GIR)? How did the idea appear? 

    The driver of this idea are George Kesselman, the founder of InsurTech Asia and me. One day last year when George was visiting me here in Frankfurt he told me about a roadshow he was organizing in 5 Asian countries. The idea to organize a similar conference in Europe was simple and caught both of us. And the rest is simple…

    3.  What mainly differentiates GIR amongst all the other existing InsureTech conferences/events? 

    On one side we are non-commercial, which makes a huge difference. We are able to offer much more competitive prices and decided not to charge any startup who wants to pitch during our conference. In addition, I think we are much more familiar or intimate. You don’t need a super-professional but somehow cold environment to feel good, make great contacts and have lots of fun.

    4.  What your attendees will take away from the GIR event? 

    They will definitely have seen the newest trends and startups in the InsurTech-ecosystem most of them have never been seen somewhere before and they will have made a lot of new contacts which are relevant for their specific kind of business.

     5.  According to you, where (in the insurance business) can technology help the most? 

    In my eyes, digitization will mostly help to improve the value chain of traditional insurers becoming more efficient, quicker, more service oriented and with less errors.

    6.  How important is innovation, namely software implementation for the industry? 

    Today’s insurer’s software landscape is extremely complex. Innovations need years due to long implementation scenarios. Every approach to solve or reduce this complexity will help. 

    7.  Where do you see the industry heading and what should businesses venture onto, in order to be in the game? 

    Digital brokers and insurers are fantastic and true innovation-drivers. However, they will have extremely hard times ahead. If they survive 5 years and are able build up a significant portfolio they will thrive. Otherwise, they will be killed by their customer acquisition cost. The enablers however will have a good chance to develop if they can help traditional insurers to improve their value chain.

    One of our goals at DAS Solutions is empowering and supporting the industry as a whole, and that’s why we are so excited to be part of #GIR2018. What is clear to us is that GIR is as much about industry’s insights as it is about harnessing a community of insurers who are eager for change, who understand that technology is the future and there is no time to wonder. 

    If you will be attending the event as well, or just around the block, let us, specifically Daria know we would love to meet you and have a chat. 

    Moving forward,
    DAS Solutions Team. 

    Insurtech is Going to Energize the Insurance Industry

    Insurtech will help the insurance industry to adapt to the digital world. The transformations taking place in the financial, mobile, IT, and other sectors are leaving insurance lagging behind. But insurance companies realize that IT requires more attention. A report found that insurance companies’ investment in insurtech, and replacing or improving information technologies generally, was expected to grow by 5 percent in 2015. That is noticeable compared to an average 3 percent in 2014 and 2 percent in 2013.

    It has become harder to define the insurance policy with the appearance of drones, driverless cars, and IoT devices. Insurance is affected by the disruption in the hospitality business as well. Have you ever thought about of what gets covered by insurance if something happens in an apartment rented using Airbnb? What about what happens while in a car ordered on Uber?

    When the lines of coverage are blurred, what is left is a grey area of confusion or a gap in protection, which can have drastic effects on customers. The good news is that this ambiguity can be relieved with the help of technology.

    Industry Challenges

    • Regulation

    Insurance companies are heavily regulated, which means that it is difficult and costly for a young company to comply with all government policies.

    • Process

    The process of getting insurance is time consuming and often involves a lot of red tape. This can discourage new customers from getting a policy in the first place.

    • Agents

    If people are able to get their insurance online without a broker’s help, this may make agents nervous. But technology can actually help brokers in their jobs, and increase their bottom line as well.

    • Brand recognition

    When it comes to life or property, people tend to trust companies with a good reputation, therefore it is hard to convince someone to entrust their belongings to a company they don’t know.

    What can be changed?

    • Re-connect with customers

    The relationship with customers has to be rebuilt. Clients have to see insurance agents as trusted advisors who are helping out with the most precious assets, such as life, family and wealth. The first step is to start talking to your customers in an accessible way and within a space where they are already the most comfortable. With the changes in technology, people communicate differently, and have a very short attention span. Adjust to their lifestyle by, for instance, sending them short text messages instead of calling to remind them about renewing a policy.

    • Re-build the system

    Innovation is brought on by small things, even the most basic customer engagement must to be improved. Build channels to communicate directly with your customers. Focus on designing applications that revolve around communication, transparency, and simplicity. According to a study,computerization and online transactions are one of the most important factors when customers choose an insurance company.

    At DAS Solutions we developed insurtech products that allow brokers and producers to complete insurance requests and sell insurance products to the client directly, while all operations between them and the insurance company are completed seamlessly by the software. This includes estimate generation, client ID validation, and automatic document generation based on the insurance product purchased. Get in touch to have a discussion about how we can optimize your business processes with a custom software solution.

    Insurtech Perspective

    Many big insurance companies are investing in IoT startups. With customer permission, devices such as smartphones, smart watches, drones or digital home thermostats which record data could be collected and analyzed by insurers. The adoption of new technologies might enable insurers to start influencing their customers’ behavior, for example by suggesting they go to the gym or indicating not to drive in certain conditions.

    Insurtech is going to help the insurance industry grow further. For that brokers need to tackle existing issues head on and start using emerging tools to their advantage. By communicating with clients in ways that meet their needs and expectations, insurance companies will build loyalty among consumers.