Smarter Analytics Solution on System z Targets Insurance Fraud

Insurance fraud is a large and growing problem around the globe. The annual cost of fraud is estimated at $30 billion to U.S. insurers and £1.9 billion to UK insurers, with similar levels of loss seen worldwide. Up to 10 percent of all claims paid are classified as fraudulent. On average, insurance organizations run on a profit margin of 2 to 3 percent. Therefore, they need a way to detect the behaviors, patterns and trends of fraudulent claims, to lessen the percent of the bogus claims paid out, and boost their bottom line.

The IBM Smarter Analytics: Anti-Fraud, Waste and Abuse Solution for Insurance is an adaptive, predictive prepayment fraud-detection solution, integrated with an insurance organization’s claims systems, that learns from the latest data and includes identity validation to optimize operational efficiencies and to reduce recovery expenses for fraudulent claims.

Expertise in Action

This solution reflects IBM’s deep insurance industry expertise and embeds industry-proven, out-of-the-box fraud-detection models containing thousands of scheme classifications. It’s a fully integrated claims fraud solution, utilizing the gamut of detection methods—predictive modeling, entity resolution, entity profiling, visualization techniques and business rules.

The new offering leverages a reliable and security-rich technology environment with IBM zEnterprise to provide prepayment fraud detection with adaptive systems. This allows insurers to learn from the latest data in order to detect suspicious transactions using predictive models and smarter business rules, as well as to harness analytics to recommend best method of interaction for each transaction. Through the use of prepayment and retrospective analysis capabilities, deployed on System z, organizations can reduce fraud, identify wasteful and abusive practices, and ultimately reduce cost by targeting processing resources in an optimal way.

The ability of System z to score requests at the time of transaction differentiates it from the competition. Unlike point solutions that address only a single step in the process or provide a simple “score,” the Smarter Analytics Solution on System z integrates multiple capabilities to help combat fraud across the entire claims lifecycle. It combines several analytical technologies and tools that help organizations:

  • Prevent fraud at the time of policy submission or the intake of claims
  • Identify it during adjudication or by examining patterns in data
  • Investigate fraud more efficiently by reducing false positive and accelerating the investigation process
  • Visualize trends and hotspots to continuously improve antifraud efforts

Optimized for Analytics

The IBM System z platform is workload-optimized for predictive fraud analytics. The IBM Smarter Analytics: Anti-Fraud, Waste and Abuse Solution for Insurance leverages the following hardware and software products:


  • IBM zEnterprise System: Linux on System z IFLs on z10, z114, z196 and zEC12
  • IBM DB2 Analytics Accelerator (optional)


  • SPSS for predictive analytics
  • DB2 for z/OS with Real-Time Scoring function
  • Identity Insights
  • i2
  • IBM Cognos Business Intelligence for reports and dashboards
  • Additional software depending on client analysis

These elements can all be sourced via the IBM zEnterprise Analytics System 9700 and 9710 offerings.

Christine McGrath is a market segment manager supporting System z solutions for the insurance industry as part of the IBM Systems and Technology Group.

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