1. SAP Conference for Financial Services 2013 / July 9-10, 2013 / London / UKHow to manage Fraud in Insurance Companies with SAP Solutions Uwe Hofstaetter, SAP AG

2. Industry Data Emphasizes the Opportunity for Fraud Management ExcellenceTotal cost in the US of insurance fraud (non-health) is estimated to be more than $40 billion per yearFraud Investigation is time consuming(Source: Federal Bureau of Investigation, US)Insurance fraud has risen by 23% in the last 12 Month. as a result, insurance fraud is estimated to now cost 2.1 billion per year. (Source: Experian Fraud Report 2012)According to the Association of British Insurers, the sector is detecting more than 2,500 fraudulent claims worth 18 million every week. (Source: Experian Fraud Report 2012)Source: Accenture global claims study (3000 personnel interviews)Historical fraud detection methods identify only 10% of fraud cases. In combination with post-payment identification only 5% of detected frauds are recovered. 2013 SAP AG. All rights reserved.4 3. What Does This Mean for Your Business? How can we identify fraud before a claim is paid?How can we improve the fraud investigation efficiency?How can we keep track with changing fraud behaviors?How can we reduce the false positive signals?What is the best approach to automate the fraud detection process and predict the likelihood of fraud?How do we manage to check all claims for fraud but ensure fast claim processing? 2013 SAP AG. All rights reserved.5 4. SAP Fraud Management for Insurance Prevent. Detect. Investigate. Monitor. PreventDetectMonitorInvestigate Powered by SAP HANASAP Fraud Management helps Insurance companies to optimize their combined ratio by identifying claim frauds and avoid payments on illegitimate claim requests 2013 SAP AG. All rights reserved.6 5. Fraud ManagementMonitoringPreventionDetectionInvestigationClaim Handling & Settlement 2013 SAP AG. All rights reserved.Fraud Monitoring & Performance OptimizationFraud Pattern AnalysisDefine Rules & Predictive ModelsOnline DetectionAlert NotificationSetup Detection StrategyCalibration & Simulation Integration Configuration PlatformSAP Fraud Management for InsuranceA Closed-loop, Cross-Functional ProcessMass DetectionInquire & AnalyzeInvestigationEvaluation & DecisionFrom Claim Notification to Claim Closure8 6. SAP Fraud Management Design & Setup Time How to detect fraud - it is your choice!Known Patterns Expert KnowledgeRule CreationUnknown PatternsDetection Methods DatabaseOptional 2013 SAP AG. All rights reserved.Detection StrategyBusiness ProcessPredictive Model Creation & Training Via SAP HANA Studio or SAP Predictive Analysis9 7. Demo SAP Fraud Management for Insurance 8. Take home messages Closed-loop Fraud ProcessingPreventDetectInvestigateMonitor Real-time & online Fraud Management Optimized InvestigationSeamless Integration into business processes Any type of fraud (e.g. claim, sales, payments, ) SAP and non-SAPPowered by SAP HANAImprove accuracy of detection Combine rules & predictive analytics for detection Real-time calibration and simulation with the power and speed of HANA 9. Thank you Contact information:Uwe Hofstaetter Uwe.Hofstaetter@sap.com