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🛡️ '''Anti-fraud program''' is a structured set of policies, procedures, and technologies that an [[Definition:Insurance carrier | insurance carrier]] implements to prevent, detect, and investigate [[Definition:Insurance fraud | insurance fraud]] across the [[Definition:Policy lifecycle | policy lifecycle]]—from [[Definition:Application | application]] and [[Definition:Underwriting | underwriting]] through [[Definition:Claim | claims]] settlement. Most U.S. states mandate by statute or regulation that insurers maintain a written anti-fraud plan, and the [[Definition:National Association of Insurance Commissioners (NAIC) | NAIC]] Insurance Fraud Prevention Model Act provides a widely adopted template. These programs address both "hard" fraud (fabricated losses or staged accidents) and "soft" fraud (inflated claims or material misrepresentations on applications), which together cost the industry tens of billions of dollars annually.

⚙️ At the operational level, a robust program typically combines [[Definition:Special investigations unit (SIU) | special investigations unit (SIU)]] staffing, automated red-flag detection rules embedded in [[Definition:Claims management | claims-management]] systems, [[Definition:Predictive modeling | predictive-modeling]] algorithms that score incoming claims for anomaly indicators, and tip lines for employees and the public. [[Definition:Insurtech | Insurtech]] vendors have introduced [[Definition:Machine learning | machine-learning]] platforms that cross-reference social-media data, geolocation signals, and network analysis to identify organized fraud rings far faster than manual review ever could. Carriers also participate in industry-wide data-sharing consortia—such as the [[Definition:National Insurance Crime Bureau (NICB) | National Insurance Crime Bureau]] and ISO ClaimSearch—where pooled information increases the odds of catching repeat offenders who move between companies.

📈 Beyond regulatory compliance, a well-run anti-fraud program directly improves an insurer's [[Definition:Loss ratio (L/R) | loss ratio]] and protects honest [[Definition:Policyholder | policyholders]] from subsidizing fraudulent activity through higher [[Definition:Premium | premiums]]. It also mitigates [[Definition:Reputational risk | reputational risk]]: regulators and [[Definition:Rating agency | rating agencies]] view a credible fraud program as evidence of sound governance. The challenge lies in calibration—overly aggressive fraud flags can delay legitimate claims and damage customer satisfaction, while too-lenient thresholds let leakage persist. Striking that balance requires continuous feedback loops between SIU findings, model recalibration, and front-line [[Definition:Claims adjuster | adjuster]] training.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Insurance fraud]]
* [[Definition:Special investigations unit (SIU)]]
* [[Definition:National Insurance Crime Bureau (NICB)]]
* [[Definition:Predictive modeling]]
* [[Definition:Claims management]]
* [[Definition:Regulatory compliance]]
{{Div col end}}

Definition:Anti-fraud program - Revision history

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