MINNEAPOLIS—April 24, 2012—FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced the availability of a new solution aimed at helping insurers curb the growing problem of insurance claims fraud. The FICO® Claims Fraud Solution uses three integrated technologies to identify more fraudulent insurance claims faster, in order to help insurers cut general insurance fraud losses that last year reached an estimated $52 billion worldwide, according to research and advisory firm Celent.
Challenging economic conditions have pushed many kinds of insurance fraud, such as auto claims fraud, to new highs in markets worldwide. In the US, insurance fraud accounts for an estimated 10-20% of insurance premiums; that number climbs as high as 25-30% in other markets, such as Brazil. A single scheme uncovered by the FBI in February 2012 racked up an estimated $279 million in losses. In the UK, the Association of British Insurers says insurance fraud costs an estimated £2 billion per year.
The FICO Claims Fraud solution provides a powerful integrated set of three fraud fighting technologies to catch more fraud. Predictive models based on neural networks, modeled after the human brain, identify potential fraud either at the point of sale or at first notice of loss, so that insurers can catch fraud before the claim is paid. The results are prioritized so that investigation actions are more efficient, focusing most on those claims most likely to be fraud.
Fraud investigators can use FICO’s business rules management system, to identify suspicious claims that match known fraud schemes. With the solution’s link analysis capabilities, fraud investigators can scour claims data to find previously undetected fraud based on connections to confirmed fraud cases found by the business rules or FICO analytics. This technique is particularly useful for uncovering fraud rings, such as “cash for crash” auto fraud schemes where criminals cause collisions with innocent drivers in order to file fraudulent whiplash and other claims. The combination of predictive analytics, link analysis and business rules finds up to 50% more fraud over a rules-based system alone.
“Personal lines and commercial lines claims deserve the same vigilance that insurers are already applying to healthcare insurance fraud, waste and abuse,” said Russ Schreiber, vice president and insurance practice leader at FICO. “FICO has been the leader in analytics-based fraud detection over the last 20 years, and we’re applying our advanced analytic approach to give personal lines insurers the most powerful protection on the market.”
In addition to the FICO® Claims Fraud Solution, FICO offers the FICO® Insurance Fraud Manager system for insurance fraud, waste and abuse. The company’s FICO® Falcon® Fraud Manager system protects more than 2 billion payment cards worldwide.
FICO (NYSE:FICO) delivers superior predictive analytics solutions that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO® Score — the standard measure of consumer credit risk in the United States — along with industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharmaceutical companies and government agencies, rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through www.myFICO.com.
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Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2011 and its last quarterly report on Form 10-Q for the period ended December 31, 2011. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
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