HUGIN EXPERT A/S

Transcription

1 HUGIN EXPERT A/S Page 1

2 Outline Bayesian networks introduction HUGIN EXPERT A/S Bayesian networks used for nonlife insurance fraud detection Page 2

3 Technology Page 3

4 Car Will Not Start The engine rotates and fuel is ok What should we do? Several possibilities Battery problem Problem with fuel system Fuel pump Fuel line Starter problem Spark plugs may be dirty We know how the engine operates How can we use this know to reason about the cause? Page 4

5 Car Will Not Start Knowledge representation of how the engine operates We know the car does not start Page 5

6 Car Will Not Start Diagnosis : Knowing the car does not start, what is the most likely cause? Prediction: What variable is most likely to tell us whether or not the car is going to start? Page 6

7 Bayesian Network Definition A Bayesian network is an efficient knowledge representation for reasoning under uncertainty Entities are represented as random variables Dependence and independence relations among entities are represented as a graph structure Strengths of dependence relations are encoded using conditional probability distributions Computes posterior distributions given evidence (observations) + = Page 7

8 HUGIN Technology The advantages of HUGIN Fraud Detection are Intuitive graphical models illustrate cause-effect Sound handling of uncertainty Computationally efficient Combines various sources of knowledge including subjective estimates and empirical data Computes with partial observations Flexible and simple to maintain and extend Other advantages of the technology Sensitivity and conflict analysis Assumptions are represented explicitly in graphical structure HUGIN software makes implementation and integration with new and existing systems simple, unproblematic and efficient Page 8

9 HUGIN EXPERT A/S Page 9

10 HUGIN EXPERT - Company Profile HUGIN EXPERT A/S A Danish company located in city of Aalborg Founded in 1989 International strategic cooperation Participation in numerous, large-scale R&D projects Export rate of approximately 90% (last 5 years) Shareholders Founders, employees, and Jens Erik Christensen (former Codan CEO) A significant technology and knowledge resource Partners Ecsact actuaries experience in HUGIN software and non-life insurance Dezide troubleshooting (call centres) 2operate troubleshooting (wireless) QSR SP500 investment strategies ELSEWARE (operational) risk management HUGIN has a unique technology, tool and source of knowledge & experience Page 10

11 Location Aalborg Gasværksvej Aalborg Denmark Phone: Fax: Part of one of the world s largest Bayesian research group Four companies in Aalborg offering tools based on HUGIN technology Page 11

12 Our logo HUGIN Expert s Logo shows the raven Hugin, one of Odin s two ravens, Munin and Hugin, and dates back to the Norse Mythology The ravens fly out and bring back news from every corner of the world. Sitting on the God Odin s shoulder, they whisper intelligence into his ears Munin represents the memory and Hugin the intelligence... and they are his embodied soul Page 12

13 Example Page 13

14 HUGIN Fraud Detection problem Figures from Danish Insurance Association indicate 10-12% of all claims are related to fraud In a large Danish non-life insurance company this implies that more than DKK annually are wrongly paid out Consequence: honest policy holders pay ~10% too much for their insurance policies Solution Insurance claim - collect information??? Risk of Fraud predicted using HUGIN Insurance claim - collect information!! Standard case Claims consultant - investigation Standard case - fast track & closing Loss consultant - investigation Outcome HUGIN Fraud Detection Solution (Customer case) Hit rate of the investigation unit increased significantly > 90% of red flag claims are fraud related Fast and high return on investment Page 14

15 Claims Handling Process Today Claim notification Claim created Damage assessment Settlement Adjustment Closing Tomorrow NOT OK - RED Claims Investigator List of high risk cases Claim notification claims handler collects relevant information OK - GREEN Routine case Risk of fraud computed Give honest customers a fast and efficient claims process Consistent, efficient and effective Improved hit rate Few false red flags A HUGIN Fraud Detection system computes probability of fraud in both real-time and batch Page 15

16 HUGIN Fraud Detection demo Consider a claims handler receiving an insurance claim How likely is it that the claim is attempted fraud? Select suspicious cases for further investigation Real-time analysis of the case Possible indicators of fraud Sex, age and location Claims history and type Technology Combines data and expert knowledge Handles uncertainty Computes with partial information Technology is easy to use, communicate to decision makers and users and integrate into existing systems. The fraud model is easy to maintain, extend and improve supporting continuous improvement (kaizen) Page 16

17 Implementation at Client Site Insurance claim - collect information!! Standard case - fast track & closing Loss consultant - investigation Oct 06 Go live Danish insurance company implemented a HUGIN Fraud Detection system 10 months from selection of technology to go-live date Significantly improved hit-rate of SIU agents Low false positive rate Dec 05 Feb 06 Selected software May 06 Modeldevelopment Aug 06 Start of Pilot Model enhancement Page 17

18 HUGIN FDM Integration Page 18

19 Customer Value Main benefits of the HUGIN Fraud Detection Man solution include Fast and significant ROI Improved hit-rate and low false-positive rate Fast, flexible, and experienced supplier of fraud detection solutions Strong reference cases Consistent, efficient and effective fraud detection management Easy Communication Easy to implement, maintain, extend, and improve Get started fast and with reduced IT efforts Technological advantages Sound mathematics / missing values / flexible technology / own speed / fast calculations Consultancy available throughout the implementation process and beyond HUGIN EXPERT offers an efficient and cost-effective fraud detection solution for non-life insurance companies. This improves fraud detection rates significantly, reducing pay outs on fraudulent claims. Unlike other solutions, our product provides a consistent, fast and transparent risk of fraud calculation. The HUGIN solution is easy to implement and use, and has a fast and high return on investment. Page 19

20 References (commercial, sample) USA Hewlett-Packard Lockheed Martin NASA/Johnson Space Center Boeing Computer Service Cisco USDA Forest Service Information Extraction & Transport Inc. Price Waterhouse TRW Orincon Corporation Raytheon Systems Company Institute for Defence Integrated Sensors, Inc. Luppold & Associates, Inc. Sandia National Laboratories Westhollow Technology Center Federal Aviation Administration KimberlyClark Corporation Milcord SPAWAR Astra Zeneca Northrop Grumman Los Alamos National Laboratory Rockwell Science Center GlaxoSmithKline Procter&Gamble QinetiQ GE Global Research Great Britain Rolls-Royce Aerospace Group Philips Research Laboratories Motorola Defence Research Agency Nuclear Electric Plc Marconi Simulation Lucas Engineering & Systems ltd BBC BT Laboratories Brown & Root Limited Silsoe Research Institute Aon Risk Consultants Shell Global Solutions National Physical Laboratories Unilever Research Laboratories Forensic Science Services QinetiQ Ltd. Germany Siemens AG Volkswagen AG DaimlerChrysler AG T-Systems Mulitmedia Solutions Reutlingen Kinderklinik Deutches Zentrum für Luft- und Raumfart TUEV Nord Toyota Page 20 France France Telecom Usinor Chevron-Oronite CM-CIC Canada Decision Support Technologies Italy ENEA CRE Casassia C.S.E.L.T. Deloitte Business Consulting Banca Populara De Sondria European Commission Israel IBM Haifa Research Laboratory Australia Department of Defence, DSTO National Australian Bank Royal Australian Airforce Japan Sumitomo Metal Industries Dentsu Inc. Intelligent Wawe Fujitsu Corp. Ricoh Scandinavia Defence Research Agency Danish Defence Research Establishm. Danish Agricultural Advisory Center COWI Danske Slagterier ABB Norwegian Petroleum Nykredit Swedpower Dezide DNV - Norway Rambøll Codan Royal Danish Administration of Navigation and Hydrography Nokia Denmark Shiptech Farvandsvæsenet Grundfos Krüger Elsam FOI Sweden Other CSIR South Africa Bradesco Bank Brazil SKF Research Netherlands National Aerospace Laboratories India TNO - Holland

21 Contact information The future belongs to those who see the possibilities, before they become obvious - Thedore Leavitt Page 21