Michelle Bergeron, Esurance Crowned 2012 Claims Professional of the Year
The 16th Annual ACE America’s Claims Event ended with a bang. The final day of the conference featured an impressive succession of fraud-oriented panels, which made the crowning of this year’s Claims Professional of the Year award all the more serendipitous.
On June 29, ACE chairperson and Claims Editor-in-Chief Christina Bramlet presented Michelle Bergeron with the distinction during a special ceremony, lauding the expert sleuth for her notable strides in fraud deterrence and prevention while at Esurance. Bergeron has become somewhat of a celebrity in the field since being interviewed by The Wall Street Journal and working closely with the NICB and other agencies. In fact, other prominent players in the fight against fraud were present in Vegas, including the NICB’s Joseph H. Wehrle Jr.
Fresh off the heels of her acceptance speech, Michelle chatted with Claims about what experiences led to this moment.
What was your initial reaction to winning this year’s award?
I was very shocked and just very humbled. My boss, Bob Cline, joked that it was like I was on Candid Camera. Even now I feel like it is very surreal that what I started almost four years ago has made an impact on our process and helped others set up systems of their own.
What precipitated the start of the SIU analyst program at Esurance? Did your background in criminal justice help prepare you for the challenge?
Initially, I was told of the job opportunity as a chance to build a program from the ground up from a colleague. I was hired by Esurance in 2008. My then-boss understood the need to implement an analytics program at Esurance. The idea of having an opportunity to try and build a better mouse trap at a very low overhead cost really intrigued me. Things are much more streamlined in the online world, but it also presents some unique opportunities for fraud that are different from your traditional agent-based carrier or even a phone sales model. I always like a challenge, and this was certainly one that pushed my limits and expanded my knowledge base.
I have always loved technology for as long as I can remember. Throughout high school and college I worked as a certified nurses aide (CNA) and initially I got a paralegal degree. I worked in an office where we handled everything from court-appointed criminal cases to personal injury suits. When I finished my Bachelors degree in Sociology (Crime, Law & Deviance) I was looking for something where I could really apply my knowledge and experience. I happened to be selling insurance for a major carrier at the time I graduated and I worked my way through the software/systems department over to the fraud unit. I think all of the things I have in my background serve me well in my current capacity.
There doesn’t seem to be any ‘one path’ to fraud analytics. If you have a natural inclination toward problem solving and a drive to investigate things, then that is a good start. Technology is a requirement in this area of fighting fraud so technical skills and computer literacy are a requirement. Many people say that SIU sounds like such a cool career and ask how they could get hired. My advice is to just get your foot in the door at an insurance carrier and keep working toward your goal.
How did you design such an innovative process from the ground up?
I think the first thing that really helped me to formulate a plan was to understand our business. Every carrier has a different process that begins with sales all the way through to the claims process. I always go through the process from start to finish myself and look for any weaknesses or areas that could be exploited. It is important to understand changes to not only the claims process over time, but also sales and service. Any change on the way a policy is obtained or a claim is reported can have a ripple effect for our fraud unit. After I felt I had a good understanding of our process I reached out to other analysts in the industry to be a sounding board for my analytics design.
The combined experience of a competent peer group is a powerful resource. We had all seen what has worked well and things that were not as successful in our careers. I used the information and suggestions to help narrow down tools and processes that would give us the “most bang for our buck.” Because we were a relatively small carrier, we needed impactful, low-cost solutions that could be maintained without monopolizing limited IT resources.
How were you able to get the buy-in of others at Esurance?
My first boss explained that we would need to start with a very modest budget and show the returns from the program. Within the first six months, we were able to find some very large, organized rings attacking our company. The successful identification of fraud that had existed undetected allowed us to expand our platform and add additional tools and resources. Additionally, Bob Cline was hired as our National SIU Manager, and he is a big supporter of our analytics program. We would not be where we are today without Bob’s assistance and the support of our senior management.
What results has your organization realized since the program’s inception?
Organized fraud detection has been very impactful to our claims unit. Identifying many suspect claims within the first 48 hours allows us to begin investigating before payments have been made and to work with the adjusters to formulate a plan of action that is proactive instead of reactive. In the past, I have seen claims sent for investigation when they are months old or even with almost all the damages already paid. We have much better results when we can get the investigation going in the beginning of the claim. Fraud is ever changing and so are our program and analytics. As soon as we close down one area of fraud, the perpetrators will find another weakness to exploit. We can never be content with what exists today and we must always be evolving.
How has the program evolved in these past years?
The fact that we have been able to add additional tools over the last few years has really bolstered our capabilities. I see our primary purpose as early fraud detection and assisting the investigators in developing their cases to a successful conclusion. Some of the analytical tools we have are very powerful and can compile extensive amounts of information in a matter of minutes or hours. That same information compiled manually could take hours or days for an investigator.
One of the most significant enhancements we have made is the self-service data access we were able to build for the investigators. I worked as a solo act for the first three years in this area. I did everything from build the systems to tactical case work. If it needed to be done I found a way to fit it in to the program. A large volume of requests were always about “if this vehicle was insured by us,” or “how much have we paid to this business/provider,” and many others. The requests were very easy to handle, but there are 40+ investigators asking those questions every day and only one person to field all those requests. I knew I could free up a lot of my time for more complex work if I could find a way to allow the investigators to retrieve their own data. We found an easy-to-use platform to navigate our various information silos called “Intellishare,” which I set out to build specifically to support this need. The entire project was based on feedback I collected from the investigators about their needs and then I balanced that with speed and performance. They can now search millions of records within seconds and get an immediate response. Additionally, the system shows interconnected data, which wasn’t something that they saw before. Now they find me organized cases to work, which is a total role reversal.
Fraud, especially organized rings, continue to plague the industry. What represents our best chance at combating the problem and deterring future abuse?
The only way I can ever imagine a deterrent effect is to have much tougher legal penalties for insurance fraud. Until the risk outweighs the potential reward, we will always have to be vigilant and work to combat fraud. Additionally, more resources need to be devoted to the prosecution of these types of offenses. This type of crime doesn’t get a lot of mainstream press and also lacks specific funding from most states to file criminal cases for fraudsters. I think the public would be far more supportive if they could actually understand how much money is taken out of their pocket to cover the cost of insurance fraud.
What specifically do SIU and claims organizations need to be doing? Are carriers sharing data and trends with each other?
Each SIU and claims organization has a unique model and structure. Because of the differences in processes, I don’t think you can have a one-size-fits-all approach. At all levels, associates who handle policies and claims need to be trained on red-flag indicators and they need to be vigilant. Underwriting, policy service organizations, and claims need to all partner with their SIUs to sharpen the saw and develop best practices. The one thing we can all do is proactively investigate fraud and communicate with other carriers. I find it discouraging that not all carriers in the industry are willing to share information and some may even have a mindset that it’s better to shift fraud to other carriers by sending the fraud “down the street.”
I don’t feel that attitude truly serves any of us in the long run. That carrier may temporarily get rid of the immediate threat, but all these groups cycle back and forth between carriers and even geographies. So then you just pass the buck and sooner or later they will be back to at your doorstep. If we take a collective approach then we can work to have people arrested or together make it so difficult that the fraudsters find it is too much trouble and the risks of getting caught are too high. I do find that most carriers are very proactive and try to share information where appropriate to assist in indentifying threats. Immunity laws vary by state so we have to understand what is acceptable in the venue. We also call upon NICB to help us exchange information between member companies. The more of our information and trends we can aggregate, the less opportunities the fraudsters have to perpetuate their schemes.