Big data analysis to be used in fraud detection

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About 10% of the RM4.8bil in motor insurance claims in 2016 were fraudulent, according to ISM Insurance Services Malaysia Bhd chairman Kong Shu Yin.

“The 10% is based on international benchmarks, so we are talking about a potential RM480mil worth of fraudulent claims from the motor segment last year,” he said.

He was speaking to reporters at a press conference at the Malaysian Insurance Summit 2017 on Monday.

Kong added that ISM is working on a Fraud Intelligence System (FIS) to detect and combat insurance fraud in the country.

“FIS uses big data analysis and we will pool together industry data to detect fraud in claims,” he explained.

The FIS is expected to be made mandatory by August next year and the insurance industry has invested more than RM10mil in the system.

Kong said the FIS is expected to reduce fraud in motor insurance claims to 2% to 3% from 10% presently.