- SAS helps insurer save money on fraud and subrogation, improve customer service -
Fireman's Fund Insurance Company, a subsidiary of one of the world's largest insurers, Allianz AG of Munich, relies on intelligence provided by SAS, the leader in business intelligence, to power critical business decisions, improve profitability and enhance customer satisfaction. The 140-year-old insurer estimates that SAS is worth $20 to $30 million a year to the company's bottom line in cost savings and increased revenue. Fireman's Fund uses SAS for virtually all its financial and operational reporting, and harnesses SAS® Enterprise MinerTM, the leading data mining solution on the market today, to improve cash flow, control losses and costs, make better decisions, and drive basic research.
In the highly competitive property and casualty insurance market, it is critical to have a clear understanding of all profitability factors. Fireman's Fund uses predictive models from SAS to address loss from fraud and subrogation - the process by which an insurance company recoups from the legally liable third party the amount it has paid out to a policyholder's claim.
On the fraud side, these models powered by SAS detect patterns in huge volumes of claims data that may reveal suspicious claims. The insurer also uses text mining to spot words associated with fraud. Fireman's Fund estimates a yearly cost savings of $700,000 from this program alone.
When these cases are automatically flagged and sent straight to investigators and specialists, both worker productivity and customer satisfaction increase. Adjusters spend their time on the appropriate cases and do not dwell on cases that require investigators. Investigators can apply their skills where needed instead of randomly looking through files for fraud. In addition, customers with low-risk scores for potential fraud receive claims payment more quickly, increasing customer satisfaction through timely service.
Fireman's Fund has also realised cost savings with SAS predictive models by detecting likely subrogation. The models have identified about $2 million in subrogation revenue each year since 1999, money that would have been lost since most claims had been closed. Also, processes were built with the models highlighting third-party deductibles, securing another $1.5 million a year that previously went unbilled.
"SAS is integral to our success," said Marty Ellingsworth, director of operations research at Fireman's Fund, who recently received a prestigious company award based in part on the analytics he's doing with SAS. "We use SAS to intelligently drive business decisions. Our aggressive use of SAS allows us to protect our marketplace and to improve our brand."
Ellingsworth identifies ease of use as another added benefit received from SAS Enterprise Miner. He estimates that he can build models 20 to 30 percent faster with the help of the intuitive and graphical nature of the solution. This enables better use of staff resources, less duplication and saves time.
"The positive experiences and huge savings from using SAS are not unique to an industry leader like Fireman's Fund," said Ritu Jain, SAS global industry strategist for insurance. "Today, more than 800 insurance companies worldwide rely on SAS' data management technology and analytic software to meet their unique and changing needs. With SAS, these insurers improve customer service, fight fraud, retain profitable customers, and ultimately, boost their bottom lines to compete effectively in a very challenging economic environment."
About Fireman's Fund
The 140-year-old Fireman's Fund is rated "A" (Excellent) by A.M. Best and in 2002 had gross written premiums of almost $4.3 billion nationally from business and personal insurance. Fireman's Fund is a subsidiary of Allianz AG of Munich, one of the leading international financial services firms, which has approximately $1 trillion in assets under management. For more information, consult www.firemansfund.com
SAS is the market leader in providing a new generation of business intelligence software and services that create true enterprise intelligence. SAS solutions are used at more than 40,000 sites - including 90 percent of the Fortune 500 - to develop more profitable relationships with customers and suppliers; to enable better, more accurate and informed decisions; and to drive organisations forward. SAS is the only vendor that completely integrates leading data warehousing, analytics and traditional BI applications to create intelligence from massive amounts of data. For more than 25 years, SAS has been giving customers around the world The Power to Know®. Visit us at www.sas.com.
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