"Utilizing [BRMS, we’ve shortened the inspection processing time for 10,000 cases from two weeks to one day, and field workers can now apply new rules in real time. The more I learn about the many features of ILOG BRMS, the more impressed I am with this advanced technology."

Dongchul, Park Senior Manager Claims Inspection Section Samsung Life Insurance

Business
Founded 49 years ago, Samsung Life has been a frontrunner of South Korea’s insurance industry throughout its history. The company offers products and services to customers in the areas of insurance, loans and investment, including pension and savings plans. Samsung Life is South Korea’s largest insurer and a member of the Million Dollar Round Table, an association of insurance planners. The company has also been ranked the 18th largest insurer in the world by Fortune magazine.

Application
Samsung Life Insurance has introduced a new insurance fraud detection system (IFDS) based on ILOG JRules, the market-leading business rule management system (BRMS). The system takes knowledge gained from insurance fraud management work and applies it automatically using ILOG JRules to prevent false claims from going through. It automates more than 60 percent of the work, while the last system only did about 40 percent, and it has shortened the inspection time for processing 10,000 claims from two weeks to just one day.

Goal
In South Korea, people are increasingly subscribing to a variety of insurance programs. Not surprisingly, the incidence of insurance fraud has also increased. Samsung Life Insurance, with the equivalent of $69 billion in reference assets and $23 billion in sales, and more than 10 million policyholders, needed a new automated insurance fraud detection system (IFDS) to address this growing problem. The company’s old system was largely a manual process in which the accident processing managers sorted out insurance fraud suspects at their discretion, which increased the probability of human error.

Results
ILOG’s BRMS helps Samsung Life Insurance scientifically and systematically search and analyze based on 800 different factors, including tracking the history of insurance fraud detections, the number of insurance accident cases and the number of insurance agreements. Fraudulent claims are separated for further inspection by field workers.

Samsung Life Insurance expects to be able to improve the utilization of its insurance fraud experts. Further, business users, instead of IT personnel, can now change and add rules themselves in a single day, according to changing inspection requirements, compared to more than two weeks using a manual hard-coding process before.

Technical
The BRMS part of the IFDS was designed and developed in six months by KSTEC, ILOG’s distributor in South Korea. Written in Java™, the system runs on HP-UX-based PCs, and uses ILOG JRules in conjunction with the SAS Statistics Data Mining system, HandySoft BPM Suite and TiMax WAS. Samsung Life plans to expand the inspection process to cover compound factors such as family, company and other groups.