NSW’s insurance watchdog is planning to roll out advanced analytics software to crackdown on fraudulent claims made under the workers compensation and compulsory third party (CTP) schemes.
The State Insurance Regulatory Authority, which is part of the Department of Customer Service, has revealed plans to introduce the software later this year to improve how it regulates the schemes.
The proposal comes more than three years after the insurance watchdog first enlisted the help of the government’s Data Analytics Centre to crackdown on CTP fraud across the state.
Fraud is considered a major factor behind CTP green slip increases in recent years, resulting in the creation of a CTP fraud taskforce in 2016 to discourage, identify and prosecute fraudulent claims.
SIRA also partnered with NSW Police that same year to establish Strike Force Ravens, which has resulted in around 30 arrests for allegedly fraudulent CTP claims worth just under $15 million.
The new technology, which the department is currently tendering for, will consist of a “fraud detection, scanning, provider management analytics engine” and analytics software.
It will be used by SIRA to “scan and identify potential fraud and monitor provider behaviour and relationships” for the two schemes, as well as the home building compensation scheme.
The home building compensation scheme is last resort cover that protects homeowners if their builder cannot complete building work or fix defects due to financial, health or regulatory reasons.
“The use of modern data analytics tools and technology will enable SIRA to significantly improve risk-based regulation of the statutory insurance schemes that it regulates,” tender documents state.
SIRA expects that the successful solution will employ various analytic techniques to identify anomalies and make predictions, including pattern recognition; link, text and visual analysis; geographic mapping and inquiry mapping.
The software will also be expected to have a machine learning capability, with some level of self-learning, and be capable of integrating with the NSW government’s existing systems, platform and data sources.
SIRA is planning to award a contract for the software, which can be provided as-a-service, that will run for up to three years. An industry briefing will be held later this month.
According to state's latest quarterly insights report, there were more than 18,000 CTP claims lodged between December 2017 and June 2019.