Trump’s corporate tax cut should leave businesses in America — including insurers — with a little extra cash in their pockets. Some companies are buying back stock, and others are handing out bonuses to their workers.
Consumer advocates are calling on state regulators to force insurers to cut rates so their insureds can benefit from the windfall as well. As an insurance consumer, I love the idea of paying less for my insurance.
But here’s another idea for insurers: Take some of that money and invest it in anti-fraud efforts. In the end, it likely will result in even greater savings for consumers.
Insurers and insurance associations have long touted that anti-fraud investments have ROIs of as much as eight to one. That’s $8 in savings for every dollar invested. So why not hire more investigators, buy upgraded anti-fraud technology or start a fraud deterrence program.
For every insurer that has a well-funded, state-of-the-art anti-fraud program, there’s another insurer that lacks the staffing, training and tools to fully detect and investigate fraud. More and more organized rings are targeting these insurers — word leaks out within the criminal underworld. Use that tax cut cash to earn a tough reputation on the streets.
Another idea: Many state fraud bureaus are woefully underfunded. Let’s increase annual insurer fraud assessments so our partners in government have the tools they need to be more-effective fraud fighters.
I’m not advocating throwing money at anti-fraud programs for the sake of just increasing budgets. But managed well, these wise investments can reward insurers and their customers many times over.
About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.