IBM Business Analytics: Preventing Fraud, Predicting Profits
Scott Laningham and I are starting to think about repacking our suitcases and preparing to head back out on the road, this time across the pond to Madrid for the IBM Smarter Commerce Global Summit May 22-24.
In Madrid, we expect to hear quite a bit about IBM’s investment in the analytics space, but that doesn’t mean we have to wait to visit the Prado to relate some interesting details about business analytics.
Specifically, predictive analytics that can help companies across the span of industries to prevent fraud.
Here’s a sound byte you may not have yet heard: Did you know that insurance fraud has reached an estimated $80 billion per year in the U.S. alone??
And in South Africa, the rate of short-term insurance fraud is about 15 percent of all premium costs.
And yet, we’ve also found that organizations that effectively apply predictive analytics are 2.2 times more likely to outperform their peers.
One such client of IBM is Santam, South Africa’s leading short term insurance company, which has saved $2.4 million on fraudulent claims in the first four months of using IBM business analytics software.
This new analytics solution has not only enhanced Santam’s fraud detection capabilities, however — it has also enabled faster payouts for legitimate claims.
In partnering with IBM, Santam’s claims division developed a new operating model for processing claims, depending on varying risk levels. IBM’s predictive analytics software has enabled Santam to automatically assess if there is any fraud risk associated with incoming claims and allows the insurer to distribute claims to the appropriate processing channel for immediate settlement or further investigation, which in turn optimizes Santam’s operational efficiency.
In turn, Santam is able to reduce the number of claims that need to be assessed by mobile operatives visiting the customer or claim site, resulting in further considerable cost savings for the company.
IBM: Investing In Analytics, Predicting Results
In the last five years, IBM has invested more than $14 billion in acquisitions. With investments in SPSS, Clarity, OpenPages, i2 and Algorithmics, and others, IBM is building business analytics solutions providing clients with capabilities for managing fraud, risk and threat. In addition, IBM has assembled almost 9,000 dedicated analytics consultants with industry expertise, and created a network of eight global analytics solution centers.
The Santam project also illustrates IBM’s leadership in analytics in Africa. IBM is also actively laying the foundations for a major presence throughout the African continent, with offices in more than 20 African countries, where the company is assisting businesses and governments in building strategies, expertise, solutions, frameworks and operating procedures to help improve performance.