Published on 05-Nov-2012
"In the first month of using the SPSS solution, we were able to identify patterns that enabled us to foil a major motor insurance fraud syndicate. Within the first four months, we had saved R17 million on fraudulent claims, and R32 million in total repudiations – so the solution delivered a full return on investment almost instantly! " - Anesh Govender, Head of Finance, Reporting and Salvage, Santam Insurance
BA - Business Analytics, BA - Predictive Analytics, BA - Risk Analytics, Big Data & Analytics, Big Data & Analytics: Operations/Fraud/Threats
Founded in 1918, Santam has grown to become South Africa’s largest short-term insurance company. With more than 650,000 policy holders and assets under management of 17 billion South African Rand (US $2.4 billion), the company enjoys a market share of more than 22 percent. It offers customers a wide range of services in personal, commercial, agricultural and specialist insurance and risk management.
Santam wanted to find a way to improve its service to customers by settling claims faster and keeping premiums low. To achieve this, the company needed to maximise operational efficiency and find smarter ways to combat fraud.
Santam worked with Olrac SPSolutions, an IBM Business Partner, to design a claims segmentation solution based on IBM SPSS predictive analytics software. Each claim is automatically scored according to its risk level, and then distributed to the appropriate processing channel for settlement or further investigation.
Allaying the perception that “change equals threat”: Santam found that letting front-line staff in on the benefits of transformation early and often can make allies out of potential detractors. “There was no pushback from the claims employees –who might ordinarily think their jobs are in danger – because we took them along early in the journey.” – Anesh Govender
Enhances Santam’s ability to detect fraud, foiling a major crime syndicate and saving 17 million South African Rand (US $2.4 million) in the first four months of operation.
Improves customer service by enabling legitimate claims to be settled within an hour, more than 70 times faster than before. Reduces the need for claims adjusters to visit clients to assess low-risk claims, significantly reducing operational costs.
By using IBM Smarter Analytics, Santam, a leading insurance provider in South Africa, has been able to predict fraud to the value of $2.4 million and increased customer satisfaction by reducing claims handling to 48 hours.
Products and services used
IBM products and services that were used in this case study.
SPSS Decision Management
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