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Insurance Fraud and Bid Collusion

A free white paper by Analytic Focus

Examining one bank loan can’t disclose structural discrimination by a lender. After a toxic groundwater spill, the sale price of one house can’t be used to find diminution in value for the area adjacent to the spill. The losses get swallowed up in the variation inherent in the activity. In the same way, there are forms of insurance fraud, bid collusion, and similar illegal activity that can only be discovered through pattern recognition and the use of artificial intelligence. Tools available for finding patterns are now available because of increasingly muscular computers and the concomitant rise in mathematical algorithms taking advantage of this new power. In this paper, I give examples of pattern recognition and the use of artificial intelligence to find groups of people engaging in patterns that harm banks, insurers, and companies. An example is also given of the use of these techniques to allocate resources efficiently to find problems before they occur

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