Return on Investment Analysis

A Fraud Detection Management system provides significant R.O.I. after the first year, and improvements that can increase your competitive position in the market

Return on Investment (ROI) after implementation for a large insurance company in saved car insurance claims. Insurance Associations in Europe estimate that 10-12% of all insurance claims involve some kind of fraud. This implies that fraud is a serious problem. The solution is efficient decision support technology to predict fraud.

The following analysis illustrates that the use of HUGIN software for improving fraud prediction can improve both the quality of information and the number of red-flag cases. This in turn produces a significant R.O.I. after only one year.

TODAY
Number of SIU agents: 10
Est. number of rejected claims: 1000
Est. amount saved due to rejected claims: EUR 5,400,000

AFTER IMPLEMENTATION OF HUGIN FRAUD PREDICTION SYSTEM
Hit-rate improvement (conservative est.): 25%
Increase in rejected fraud claims: 250
Total number of rejected claims: 1250
Increase in savings due to rejected claims: EUR 1,350,000
Red-flag precision: 90%
Red-flag claims: 1389

ROI - SAVINGS
Savings first year: EUR 1,255,500
Savings each of following years: EUR 1,286,000

DEVELOPMENT COSTS
HUGIN Fraud Prediction Development license: EUR 30,500

This development license includes:

• 2 users HUGIN Developer license

• 3 day off-site HUGIN training (2 users)

• 2 x 2 day on-site HUGIN Consultancy workshops

• 3 month test deployment license (HUGIN royalty license)

YEARLY FEE
HUGIN Fraud Detection Management deployment license: EUR 64,000

This yearly deployment license includes:

• HUGIN Developer support pack for 2 users

• Software deployment license (HUGIN royalty license)

The development license costs are computed based on 2 users. If additional users are required the development license costs will change. The deployment license covers a system with 10 SIU agents.

Please download ROI analysis document here.