Insurers' use of predictive analytics to fight fraud has reached an all-time high, according to an insurance fraud technology study by the Coalition Against Insurance Fraud and SAS. The study reveals that 80% of insurers use predictive modeling to detect fraud, up from 55% in 2018. In a category new to the 2021 survey, the study also underscores the importance of identity verification software, cited by 40% of survey respondents. Identity analytics is quickly becoming must-have technology for insurers amid an alarming spike in malicious phishing scams, up 600% since the pandemic's onset. "The shifts we've seen since the 2018 study emphasize the increasingly sophisticated technologies needed to foil insurance fraudsters' criminal exploits," said David Hartley, Director of Insurance Solutions at SAS. "Predictive modeling is up 25%. Text mining has nearly doubled, jumping from 33% to 65% in three years. These findings prove that, even as COVID-19 has fueled rampant fraud, insurers are agilely stretching their advanced analytics capabilities to counter rapidly changing threats."

While incumbent insurance providers continue to get disrupted by startups like Lemonade, Alan, Clearcover, Pie and many others applying tech to rethink how to build a business around helping people and companies mitigate against risks with some financial security, one issue that has not disappeared is fraud. Today, a startup out of France is announcing some funding for AI technology that it has built for all insurance providers, old and new, to help them detect and prevent it. Shift Technology, which provides a set of AI-based SaaS tools to insurance companies to scan and automatically flag fraud scenarios across a range of use cases -- they include claims fraud, claims automation, underwriting, subrogation detection and financial crime detection -- has raised $220 million, money that it will be using both to expand in the property and casualty insurance market, the area where it is already strong, as well as to expand into health, and to double down on growing its business in the U.S. It also provides fraud detection for the travel insurance sector. This Series D is being led Advent International, via Advent Tech, with participation from Avenir and others. Accel, Bessemer Venture Partners, General Catalyst, and Iris Capital -- who were all part of Shift's Series C led by Bessemer in 2019 -- also participated.

One of the biggest challenges facing any insurance provider is the very real risk of insurance fraud. In 2014, UK insurers uncovered 130,000 fraudulent claims worth £1.32 billion across all insurance products. This danger shows no sign of slowing either, with professional and opportunistic insurance fraud numbers still on the rise. So, how can insurers effectively analyse data help to combat insurance fraud? A major insurance company has proactively combatted fraud before a fraudulent claim is filed or before they would even offer the customer a policy.