OPTIMIZED SYSTEMS

Insurance Information System Reduces Fraud and Excess Costs

Rebecca Kutzer-Rice | Date: 09-30-11 | Comments

Nearly 25 percent of insurance policies in Bulgaria are fraudulent, resulting in unnecessarily high costs for responsible drivers. A new automated system will mine police archives and other data to reduce fraud and improve customer service.

In Bulgaria, the Insurance Guarantee Fund is working with IBM to bring a new information system to the country�s motor insurance providers. The automated system should improve customer service while cutting costs for all parties.

A government-supported organization, The Guarantee Fund works to protect both consumers and providers of motor insurance in Bulgaria. Currently, nearly a quarter of insurance policies there are fraudulent, leading to higher costs and other inaccuracies.

The IBM-designed system includes software, hardware, services, and business-analytics technologies to enable insurance providers to authenticate customer information. By integrating several databases, such as police archives, the tool will identify a variety of policy problems and inaccuracies. Providers will be able to reward responsible drivers with lower rates while reducing the number of fake claims.

"The new solution will enable the Bulgarian motor industry to optimize performance, mitigate risk, and better control costs," said Borislav Mihaylov, CEO of the Insurance Guarantee Fund Bulgaria, according to a statement. "For us it is very important to integrate data across multiple sources allowing for the effective coordination and monitoring of insurance claims bringing benefits to insurance providers and drivers alike.�

The new system includes IBM�s DB2 database software and incorporates data mining technology, data visualization techniques, and an anomaly-detection engine. While these technological tools have traditionally been used for business intelligence and financial performance management, the new system will use them to make sense of driver histories.

"IBM is working with companies and government organizations in the financial services sector around the world to introduce smarter systems which use intelligence to drive operational efficiencies, customer centricity and better risk management," said Alexander Rakov, General Manager of IBM Bulgaria, in a statement.

"This is one of the most sophisticated information systems in the country which supports the very highest standards in the Bulgarian motor insurance industry," Rakov continued.

The automated information system uses IBM Power Systems, IBM System Storage DS8300, and IBM BladeCenter to support its mixed workloads. As a part of the program, IBM will provide maintenance services and upgraded technologies to Bulgaria�s Insurance Guarantee Fund.