Salih Taşyon, Head of Insurance Fraud and Abuse Bureau of Turkey (SİSEB): “We know that 80 billion USD of total insured losses in USA are fraudulent and abusive claims. British state that they catch 2.1 billion GBP of insurance fraud and abuse. We estimate this amount has reached 1 billion TL in Turkey.”
Could you briefly inform us about the purpose of SİSEB’s foundation?
SİSEB (Insurance Fraud Bureau of Turkey) was founded by the Insurance Association of Turkey in 2015 within the organizational structure of Insurance Information and Monitoring Center. It was founded with the aim of detecting fraud and abuse cases that we call organized cases and cannot be detected by the insurance companies using only their own data; in order to prevent the financial losses in insurance market. We have 2 units in our organizational structure, one of which are Fraud and Abuse Inspection Unit. This unit consists of employees that have experience in the insurance market; and has extensive knowledge of policy general conditions, coverage scope and legal dimensions. They are constantly in contact with insurance companies. Our colleagues in this department have studied computer sciences and mathematical engineering; this team analyzes the data, develops analytical methods and uses technology to find ways of catching insurance fraud and abuse with existing data.
Our legal foundations lay in the aggravated fraud clause of Turkish Criminal Law, and Regulation on Insurance Malpractices published in the Insurance Law and Official Gazette. We are an organization that aims to reduce financial losses in the insurance market and are responsible of coordinating the fight of insurance companies against organized insurance fraud and abuse. We also aim to provide an efficient cooperation with the insurance market; we monitor fraud and abuse cases together. We file criminal complaints against organizational fraud cases. We support insurance companies with trainings, meetings and visits about how they can fight against cases of insurance fraud and abuse. We also provide periodical reports for insurance companies, helping them compare themselves with the rest of the market. Most importantly, we try to manage the perception of abuse and fraud. We wish to spread the apprehension that “insurance abuse is a crime” to he entirety of our society. In accordance with all these targets, we try to provide services to all other stakeholders in the market besides insurance companies, including the agents, experts, repair shops and citizens. We are working integrated with 22 public institutions.
What are the functions of SİSEB?
One of our functions is our technological side where we try to create a difference, use the data and detect anomalies through several projects. We move together with the insurance market in all our projects. One of our functions is to take decisions via committees of the Insurance Association of Turkey (TSB) by referring to consultants whenever necessary. Training is also very important among our institution’s activities. We are also working towards developing our suspicious transaction pool.
How does SİSEB detect insurance abuse and fraud? Can you tell us about the reporting pool model?
We use an analytical model to detect abuses and frauds. Every day, we share suspicious claim files with insurance companies and warn them. We request them to examine the files and give us feedback. We make detailed examinations and analyses in many points; such as looking for relations between 2 drivers who get involved in an accident. In light of such data, we give scores to claims files. Our system is a continuously learning analytical model. As it learns more, it can present more accurate results. We create relation scores using social media. We can detect people and businesses that bear high risk of fraud and abuse. Moreover, we conduct behavioral analyses which include several analytical projections such as their longevity in the system, total amount of their claims, regularity of their payments, and whether they were previously included in risky files etc.
Founded with the aim of detecting abuses and frauds in the system, our reporting pool is a platform where everyone including citizens, agents, companies or other institutions can report suspicious transactions. For instance, when an insurance company detects a suspicious transaction or an actual abuse, we enter this information into our system, which helps other companies take preventive measures against the parties of that event. However, we do not take action for abuses and frauds detected by an insurance company using their own data. We generally focus on more organized abuse and fraud cases that are over certain amounts and concern more than one companies.
We know that training is very significant in terms of insurance fraud and abuse. Can you inform us about SİSEB’s activities in this area?
We try to improve the perception of fighting against insurance fraud and abuse through trainings we organize in cooperation with Turkish Insurance Institute (TSEV). Every year, we organize 8 to 10 trainings in this field. These trainings focus on a wide range of audience from external investigators to insurance company staff. Five times a year, we also organize trainings that are led by the Gendarmerie and Coast Guard Academy. Our trainings also include legal and major insurance modules.
What are the benefits of your system for the insurance market?
At the beginning of 2017, we have shared 420 million TL worth of suspicious files that were caught by our system in the auto insurance line with insurance companies. Among those files, cases totaling 24 million 675 thousand TL in worth were approved by insurance companies as abuse and fraud.
In addition, we ask insurance companies to send us files about fraudulent and abusive acts that they have detecting using their own means and add them to our system so that it can continue learning. Since 2011, our system caught 32 thousand hits in terms of suspicious people. And we have received 21 thousand reports. During 2017, we have provided the insurance market with a benefit of 100 million TL by detecting frauds and abuses. This amount does not include the frauds and abuses detected by insurance companies detected through their own systems and operations. We inform insurance companies about the abusive and fraudulent cases and what they should be vigilant about. The smallest word in a claims file can cause us to examine that file as suspicious and sometimes even reject it.
What are SİSEB’s current targets?
We continue to work for other branches and conduct projects. We also try to inform people and organizations about fight against insurance fraud on our website. We work integrated with medical institutions in health insurance branch. Rate of abuse and fraud is really high in this branch; however, as personal data is concerned and we are very sensitive about it, we use different scoring methods in this area. We never share personal information. Collecting and safeguarding the information is of vital importance; it is also significant how to serve that information. We are very sensitive in this regard. Physical damage is one of the areas that see highest amount of abusive claims in traffic insurance. We are working towards addressing that area as well. We try to provide services for the insurance market with similar models in every branch.
What do you see when you compare Turkey to other countries in terms of insurance fraud and abuse?
We examine the practices conducted in Europe and the rest of the world in terms of insurance abuse and fraud. We know that we still have a long way to go. Insurance companies need to notice and fight against insurance abuse and fraud. We see that fraudulent and abusive insurance transactions are all around the world. For instance, we know that 80 billion USD of total insured losses in USA are fraudulent and abusive claims. British state that they catch 2.1 billion GBP of insurance fraud and abuse. German estimate that their loss is higher than 4 billion EUR in this area. We estimate this amount has reached 1 billion TL in Turkey. 15 percent of paid claims in France and 10 percent in the Netherlands are abusive and fraudulent claims. This ratio changes between 10 and 30 percent in Turkey.
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