sap fraud management for insurance - sapevent.ch · sap fraud management – design & setup...
TRANSCRIPT
© 2013 SAP AG. All rights reserved. 2
Legal Disclaimer
This presentation is not subject to your license agreement or any other
agreement with SAP. SAP has no obligation to pursue any course of
business outlined in this presentation or to develop or release any
functionality mentioned in this presentation. This presentation and
SAP's strategy and possible future developments are subject to
change and may be changed by SAP at any time for any reason
without notice. This document is provided without a warranty of any
kind, either express or implied, including but not limited to, the implied
warranties of merchantability, fitness for a particular purpose, or non-
infringement. SAP assumes no responsibility for errors or omissions in
this document, except if such damages were caused by SAP
intentionally or grossly negligent.
© 2013 SAP AG. All rights reserved. 3
Industry Data Emphasizes the Opportunity for
Fraud Management Excellence
“Total cost in the US of insurance fraud (non-health)
is estimated to be more than $40 billion per year” (Source: Federal Bureau of Investigation, US)
“Insurance fraud has risen by 23% in the last 12
Month…. as a result, insurance fraud is estimated to
now cost £2.1 billion per year. ” (Source: Experian Fraud Report 2012)
“According to the Association of British Insurers, the
sector is detecting more than 2,500 fraudulent claims
worth £18 million every week”. (Source: Experian Fraud Report 2012)
Historical fraud detection methods identify only 10% of fraud cases. In combination with post-payment identification
only 5% of detected frauds are recovered.
Source: Accenture global claims study (3000 personnel interviews)
Fraud Investigation is time consuming
© 2013 SAP AG. All rights reserved. 7
What Does This Mean for Your Business?
How can we identify fraud before the financial
damage has happened e.g. a claim is paid?
How can we improve the fraud investigation
efficiency?
How can we keep track with changing fraud
behaviors?
How can we reduce the false positive signals?
What is the best approach to automate the fraud
detection process and predict the likelihood of
fraud?
How do we manage to check all claims for fraud
but ensure fast claim processing?
How can we better fulfill compliance regulations?
© 2013 SAP AG. All rights reserved. 9
SAP Fraud Management for Insurance Prevent. Detect. Investigate. Monitor.
SAP Fraud Management helps Insurance
companies to optimize their combined ratio
by identifying claim frauds and avoid
payments on illegitimate claim requests
Closed-loop Fraud Processing: Supporting the full cycle of Fraud Management enabling you to detect and
prevent claim fraud across multiple line of business with direct impact on your loss ratio.
Seamless Integration: Bi-directional integrated fraud processing to detect suspicious claims as early as possible
and real-time information flow to ensure focused and integrated investigation
Optimized Investigation: Intuitive functionality to support your fraud investigators process fraud alerts from first
fraud signal to final decision in the most efficient way.
Prevent Detect
Investigate Monitor
Powered by SAP HANA
© 2013 SAP AG. All rights reserved. 11
Investigation
Detection
Prevention
Monitoring
Alert
Notification
Fraud Management A Closed-loop, Cross-Functional Process
Fraud
Pattern
Analysis
Claim Handling
& Settlement (*)
Inquire &
Analyze Investigation
Inte
gra
tio
n
Con
fig
ura
tio
n
Pla
tfo
rm
Evaluation &
Decision
Fraud Monitoring & Performance Optimization
From Claim Notification to Claim Closure
Define Rules
& Predictive
Models
Setup
Fraud Detection
Strategy
Calibration &
Simulation
Online
Detection
Mass
Detection
Fraud
Investigator
Business
Analyst CIO
Head of Claim
Management
Head of Fraud
Investigation
SA
P F
rau
d M
an
ag
em
en
t fo
r In
su
ran
ce
(*) Claim Handling & Settlement is ONE of the business processes
SAP Faud Mangement for Insurance can work with
© 2013 SAP AG. All rights reserved. 12
Fraud Prevention Objectives, Issues, Capabilities, and Benefits
Hybrid combination of rules and
predictive methods to identify fraud
Business users are enabled to define
fraud detection strategies incl.
optimization based on weight factors
and thresholds
Real-time simulation and calibration of
fraud detection strategies
All data from different source (SAP and
non-SAP) can be
Determination of strategies detection
based on fine granular criteria
Unknown fraud patterns often not
identified
Time consuming process and high
effort to change existing rules
No system support to simulate impact
of detection methods
Pattern analysis and fraud rule testing
limited to sample data from only a few
data sources
Limited capabilities for LoB specific
fraud criteria
Identify unknown patterns and react
quickly on changing fraud behaviors
Reduced effort without IT-involvement
to set up and calibrate fraud detection
strategies
Transparent, real time information of
impact on new / changed strategies
No misinterpretations of fraud behaviors
due to sample data
Reduced false positive and streamlined
fraud detection
Issues Key business capabilities Benefits
Objective: Define high effective fraud strategies based all relevant data in an easy way without IT-Involvement
Best practice solution: Real time fraud pattern analysis and advanced, easy to use capabilities to set up hybrid
fraud detection strategies.
© 2013 SAP AG. All rights reserved. 13
Fraud Prevention Detailed capabilities
High-speed pattern
analysis based on all
available data
Consolidated data from
SAP and non-SAP
sources within SAP
HANA
Pattern Analysis Predictive Analysis Fraud Detection
Strategy
3 2 1
Design mathematical
modes to predict
likelihood of fraud
Model design and the
data visualization
Drag-and-drop visual
interface for data
selection, preparation,
and processing
Broad visualization
capabilities
Combination of fraud
rules and predictive
analytical methods
Intuitive way of setting up
fraud detection strategies
Define individual weight
factors and thresholds to
calculate risk score
Fine granular
determination of fraud
detection strategy
Simulation &
Calibration
4
Real-time simulation of
defined strategies to
reduce false positive
Optimize results of fraud
strategies with real-time
calibration
Capability to compare
fraud detection strategies
for further optimization
Define fraud detection strategies in combination of rules and predictive analytical methods including real-time simulation and
calibration of these strategies.
Provides an intuitive, easy-to-use environment for designing predictive models and visualizing data, which allows to uncover
hidden and untapped fraud patterns including a broad range of data and model visualization capabilities to gain higher insight
© 2013 SAP AG. All rights reserved. 14
SAP Fraud Management – Design & Setup Time How to detect fraud - it is your choice!
Expert
Knowledge
Database
Detection
Methods
Detection
Strategy Business
Process
Predictive Model
Creation & Training
Rule
Creation
Known
Patterns
Unknown
Patterns
Via SAP HANA Studio or
SAP Predictive Analysis Optional
© 2013 SAP AG. All rights reserved. 15
SAP Fraud Management How to detect fraud - it is your choice!
Expert
Knowledge
Database
Fraud Detection
Strategy
Predictive Algorithm
Known
Patterns
Unknown
Patterns
External
Hint
Rule
Fraud
Detection
Alert
Alert
Alert
Data Analysis
© 2013 SAP AG. All rights reserved. 16
Predictive Algorithm to identify unknown Fraud Patterns SAP Predictive Analysis
© 2013 SAP AG. All rights reserved. 17
Visualization gains insight into unknown Fraud Patterns SAP Predictive Analysis
Parallel Coordinates
Scatter Plot
© 2013 SAP AG. All rights reserved. 18
Unknown Patterns: Informed & adapted with Predictive Insights SAP Predictive Analysis
DecisionTree
© 2013 SAP AG. All rights reserved. 19
Fraud Detection Strategy - Detection Methods SAP Fraud Management
© 2013 SAP AG. All rights reserved. 21
Fraud Detection Objectives, Issues, Capabilities, and Benefits
Online fraud detection at any point and
as often as needed within claim process
High-speed mass detection due to
HANA technology
Provide claim handler with fraud signals
while capturing data based on hybrid
fraud detection strategies
Fully integrated bi-directional fraud
processing
Fraud situation often identified after
settlement of claim
No capabilities to check existing claims
with updated fraud strategies
Fraud detection based on claim
handlers experience; manual process to
overcome system boarders
Limited to no real-time process
integration into claim handling process
Identify fraud as early as possible -
before claims are further processed and
paid
Use online real-time detection or mass
detection without limitations
Early identification of potential fraud
situation to enable claim handler
gathering more data
Apply automated fraud detection to
reduce manual work, ensure re-scoring
due to claim changes and provide
results of investigation back as soon as
possible
Issues Key business capabilities Benefits
Objective: Detect fraud situations as early and as precise as possible to avoid claims payments for fraudulent
cases without manual work Best practice solution: Integrated fraud detection with online & mass detection capabilities incl. transparent
scoring results and seamless process integration
© 2013 SAP AG. All rights reserved. 22
Fraud Investigation Objectives, Issues, Capabilities, and Benefits
Up-to-date fraud scoring based on
hybrid fraud detection strategies
Full insight into all relevant information
at the fingertip
Advanced alert management
functionalities and capabilities
Calibration of existing fraud strategies
with weight factors and threshold to
reduce false positive
Fully integrated bi-directional fraud
processing
Significant work and effort spend on
non value cases
Time consuming data gathering due to
system boarders
High effort due to insufficient
investigation capabilities
High workload due to huge number of
false positive
Changed claim situation not visible for
Investigators
Increase investigator ROI by focusing
on high score / high value cases
Faster fraud processing to avoid
blocking a claim longer than needed
Improve investigator efficiency and
reduced fraud processing expenses
Improved accuracy of fraud detection
with reduced false positive and false
negative detections
Investigation always on up-to-date
information to avoid double work
Issues Key business capabilities Benefits
Objective: Investigate on fraud cases with an environment for processing fraud cases more effective and efficiently.
Best practice solution: Closed loop fraud investigation processing, full insight into all relevant information, high-
speed in-memory analysis to identify fraudulent behaviors and advanced alert management capabilities
© 2013 SAP AG. All rights reserved. 23
Fraud Investigation Detailed capabilities
Online and mass detection
fully integrated into Claim
process
Alert generation based on
individual thresholds
Automated coverage
referrals set based on
identified fraud signal
Risk score & Value based
prioritization of work list
Alert Notification Inquiry & Analyze Investigation
3 2 1
Integrated insight into all
relevant information such
as claim, claim history,
involved parties, …
Google-like search across
data sources
Explorative Analysis and
ad-hoc queries to gain
complete perspective of
situation
Network Analysis to
identify relationships and
networks
Fast and intuitive way to
capture of investigation
findings
Collaboration with external
investigators in the field
Comprehensive
Alert Management
capabilities
Evaluation &
Decision
4
Fast-Decision Support to
enable efficient fraud
investigation
Based on decision
capturing further claim
processing is being
triggered accordingly
Closed-loop fraud investigation processing to capture all findings of the fraud investigator up to the final
decision. Support streamlined processing due to full insight, high-speed in-memory analysis and social
network analysis to identify suspicious behaviors.
© 2013 SAP AG. All rights reserved. 29
Evaluation & Decision – Alert Documentation SAP Fraud Management
© 2013 SAP AG. All rights reserved. 31
Fraud Monitoring & Optimization Objectives, Issues, Capabilities, and Benefits
Work and performance analysis incl.
operational reporting
Monitor and optimize quality of
investigation
Permanent analysis of results
including real-time calibration of
strategies
Poor control over team workload
and overdue fraud signals
Limited capabilities to measure fraud
investigation performance
No Insight into effectiveness of fraud
rules and strategies
Accurate, consistent and transparent
data for informed business decisions
- any time & anywhere
React immediately on changing
situation to improve efficiency
Optimized fraud strategies based on
real time data to react on changing
fraud behaviors
Issues Key business capabilities Benefits
Objective: Real-time performance analytics and management reporting to make informed decisions and take
appropriate, timely action
Best practice solution: User-centric dashboards provide users on all level with accurate and consistent data
© 2013 SAP AG. All rights reserved. 34
IT & Technology Objectives, Issues, Capabilities, and Benefits
Highly integrated & configurable
solution based on flexible and
communication based open
standards
Scalable, component-based
standard application
Business users are enabled to
define fraud detection strategies incl.
optimization based on weight factors
and thresholds
High integration and maintenance
costs due to a multitude of diverse
functional systems
Hugh effort to keep track with ever
demanding requirements of
business units to address changes
in insurance fraud trends
Development and maintenance of
fraud strategies requires IT
involvement
Flexibility to configure the solution
based on specific business needs
integrated in your existing system
landscape
Implementation in a step wise
approach and adapt solution
depending on the business needs
Reduced effort without IT-
involvement to set up and calibrate
fraud detection strategies
Issues Key business capabilities Benefits
Objective: Respond rapidly to business needs while keeping costs under control
Best practice solution: Integrate one strategic and integrated closed-loop fraud solution across LoB´s for best
overall TCO
© 2013 SAP AG. All rights reserved. 35
SAP Fraud Management for Insurance Prevent. Detect. Investigate. Monitor.
Prevent Detect
Investigate Monitor
Powered by SAP HANA
Closed-loop Fraud Processing Execute your fraud program with most comprehensive approach
Increase investigator´s effectiveness and efficiency
1
2
3
Enable real-time fraud management across your value chain
Seamless Integration
Optimized Investigation
© 2013 SAP AG. All rights reserved. 36
No part of this publication may be reproduced or transmitted in any form or for any
purpose without the express permission of SAP AG. The information contained
herein may be changed without prior notice.
Some software products marketed by SAP AG and its distributors contain
proprietary software components of other software vendors.
Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of
Microsoft Corporation.
IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5,
System x, System z, System z10, System z9, z10, z9, iSeries, pSeries, xSeries,
zSeries, eServer, z/VM, z/OS, i5/OS, S/390, OS/390, OS/400, AS/400, S/390
Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6,
POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes,
BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF,
Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere,
Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM
Corporation.
Linux is the registered trademark of Linus Torvalds in the U.S. and other
countries.
Adobe, the Adobe logo, Acrobat, PostScript, and Reader are either trademarks or
registered trademarks of Adobe Systems Incorporated in the United States and/or
other countries.
Oracle and Java are registered trademarks of Oracle and/or its affiliates.
UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.
Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and
MultiWin are trademarks or registered trademarks of Citrix Systems, Inc.
HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C®,
World Wide Web Consortium, Massachusetts Institute of Technology.
© 2011 SAP AG. All rights reserved.
SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP BusinessObjects
Explorer, StreamWork, and other SAP products and services mentioned herein as
well as their respective logos are trademarks or registered trademarks of SAP AG
in Germany and other countries.
Business Objects and the Business Objects logo, BusinessObjects, Crystal
Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business
Objects products and services mentioned herein as well as their respective logos
are trademarks or registered trademarks of Business Objects Software Ltd.
Business Objects is an
SAP company.
Sybase and Adaptive Server, iAnywhere, Sybase 365, SQL Anywhere, and other
Sybase products and services mentioned herein as well as their respective logos
are trademarks or registered trademarks of Sybase, Inc. Sybase is an SAP
company.
All other product and service names mentioned are the trademarks of their
respective companies. Data contained in this document serves informational
purposes only. National product specifications may vary.
The information in this document is proprietary to SAP. No part of this document
may be reproduced, copied, or transmitted in any form or for any purpose without
the express prior written permission of SAP AG.
© 2013 SAP AG. All rights reserved. 37
Fraud Management – Architectural Overview
SAP HANA
SAP ERP
R
Tables, Views, Procedures
Non - SAP
Application Server ABAP
Fraud Management
Mobile
Native iPad App
Browser
Desktop UI
R R OData via SUP
R
R
BOBJ Data Services
SAP LT Replicator
Service
© 2013 SAP AG. All rights reserved. 38
SAP Fraud Management – Design & Setup Time How to detect fraud - it is your choice!
Detection
Investigation
Create Alert
Create Alert manually (e.g. whistle blower)
Create Alert automatically via Detection
Online & Mass Detection
Capability for extensibility such as customer specific workflow, …
Assign Alert
“Pull” by Investigator
Assigned to Investigator by Fraud Dispatcher
Assigned automatically due to customer specific algorithms (based on
extensibility options)
Investigate Alert
Task Management
Case Management
Configurable Activities
Capability for extensibility such as customer specific workflow,..
© 2013 SAP AG. All rights reserved. 39
Inquiry & Analyze – Conflict of Interests SAP Fraud Management
© 2013 SAP AG. All rights reserved. 40
Inquiry & Analyze – Conflict of Interests SAP Fraud Management