CCC Intelligent Solutions and Verisk Analytics have announced a partnership to mitigate auto physical damage (APD) claims fraud, specifically those possible through artificial intelligence (AI) applications.

CCC, as a leading P&C insurance cloud platform along with Verisk, a leading global data analytics and technology provider, plan to “drive innovation into the claims process for insurers” to benefit the collision industry overall, according to CCC Chief Strategy Officer Marc Fredman.

When Repairer Driven News asked how collision repair businesses benefit from the initiative, Fredman said they “could benefit from not working on fraudulent claims that don’t end up getting repaired.”

When fully integrated, carriers will be able to quickly and easily identify potential fraud in real-time through Verisk’s fraud analytics within existing CCC-powered workflows, according to CCC.

“Mitigating fraud is a priority for insurers,” Fredman said. “By bringing the right data elements to adjusters’ fingertips, we can help them reduce fraud risk.”

The Coalition Against Insurance Fraud has estimated the cost of U.S. insurance fraud to be more than $308 billion a year. According to the FBI, fraud costs the average family between $400 and $700 a year in premiums. With the increasing adoption of technology and the emergence of new capabilities like generative AI, the threat of fraud is expected to increase, CCC said.

“With macro-economic pressures like inflation and supply chain constraints, coupled with increasing criminal sophistication, it’s become necessary for insurers to quickly and accurately detect and defend against fraudulent claims,” said Shane Riedman, Verisk anti-fraud solutions general manager. “Verisk’s work with CCC will enable insurers to leverage robust analytics and powerful technology to not only reduce fraud loss but also accelerate the resolution of meritorious claims, thus providing better, faster service to policyholders.”

A recent example of APD fraud comes out of Massachusetts. On May 3, Attorney General Andrea Campbell shared details of a Holbrook man convicted on eight counts of motor vehicle insurance fraud and seven counts of larceny.

A statewide grand jury indicted Dion Augustin, 26, in July 2020 for a “fraud scheme” he carried out between August 2016 and May 2017 by obtaining loans and buying insurance coverage on luxury vehicles, staging collisions severe enough to result in total losses, and filing claims for the damages.

Superior Court Judge Douglas Wilkins sentenced Augustin to two and a half years in the Norfolk House of Correction followed by two years of probation. While on probation, Augustin will be prohibited from contacting any witnesses and from purchasing or selling automobiles through any means in his name or someone else’s name. Augustin will also pay restitution in an amount to be determined at a later hearing.

Augustin stole over $136,000 from lenders and caused over $201,000 in loss to the insurance carriers, Cambell said. The AG’s Office began its investigation after a referral from the Insurance Fraud Bureau of Massachusetts.

CCC and Verisk believe that with the expanded use of AI, the risk of insurance fraud will likely become more prevalent but can also aid in flagging fraudulent attempts.

Fredman explained that “AI is dynamic technology with incredible potential to provide value throughout the insurance and repair industries but also creates the risk of misinformation in the form of altered text and other media. We need to all be vigilant that this misinformation does not increase the incidence of fraud. AI will help us do that by observing patterns, flagging outliers, and other advanced capabilities.”

The newest project between the two companies builds on their existing integration and is in the early stages of development. CCC and Verisk plan to share at a later date when the changes will go live within CCC’s platform. Auto insurers can currently use CCC’s platform to access insights from Verisk’s Liability Navigator to help assess damages in bodily injury claims.

Additional projects between the companies haven’t been announced but Fredman said “leveraging the two providers’ market-leading technologies, there are many ways we can bring new innovations to P&C insurance claims.”

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