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In a bid to reduce cases of insurance fraud, the Hong Kong Federation of Insurers (HKFI) recently launched an insurance fraud detection database to protect both insurers and policyholders.
The Insurance Fraud Prevention Claims Database (IFPCD) will utilise state-of-the-art artificial intelligence (AI) technology to detect different types of insurance fraud, particularly those involving multiple claims and syndicates.
The IFPCD is fully compliant with the European Union’s General Data Protection Regulation (EU-GDPR), and its AI is powered by French insurtech company Shift Technologies.
“By nature, fraud is not easy to detect,” said Harry Wong, chairman of the HKFI provisional executive committee on IFPCD.
“In respect of indemnity insurance, experience in other markets overseas shows that for every $100 paid out in claims, about $10 to $15 would involve certain elements of fraud.
“Hong Kong is lagging far behind many other insurance markets in terms of fraud detection and prevention. We need to move ahead quickly to catch up. Hence [we launched] this IFPCD to protect the interest of honest policyholders.”
The HKFI said that the IFPCD is being developed in phases, with the first phase covering auto, medical, and personal accident insurance. Succeeding phases will cover segments including life and travel insurance.
To ease data privacy concerns, an independent steering committee comprised of community leaders and experts in related fields will oversee the proper establishment and operations of the IFPCD.
“Fraud, in whatever form, is a serious crime and we support the initiative of HKFI to set up this IFPCD to help combat insurance fraud in the common interest of policyholders,” said Edward Chan, chairman of the steering committee on IFPCD.
“In the process, the Federation has demonstrated firm commitment to doing its best endeavours to fully comply with the letter and spirit of the relevant data privacy legislation in Hong Kong.”
