RiskStream Collaborative and Opaque Team Up to Fight Insurance Fraud

Insurance fraud is a major industry challenge

With the FBI and National Insurance Crime Bureau (NICB) estimating the total cost of non-health insurance fraud at more than $40 billion per year. Fraudsters often take advantage of the highly fragmented nature of the industry,

knowing that—due to data privacy limitations—individual insurers can typically only analyze their own data rather than pooling and analyzing it to identify potential patterns of fraudulent activity. Because fraudsters use blind spots to carry out criminal activity, exchanging loss incident data between disparate insurers is often mission-critical to successfully identifying and mitigating fraud attempts.

RiskStream Collaborative, the insurance industry’s largest blockchain consortium, is on a mission to provide this essential capability with RAPID X, a blockchain-powered auto claims data platform that facilitates claims data exchange between multiple insurance carriers to better detect and prevent fraudulent activity, from auto fraud to workers’ compensation fraud.

When building RAPID X, RiskStream had to create a robust foundation for data exchange between insurance carriers that was both secure and compliant with privacy laws and regulations. Collaborative members needed to have the assurance that their data would be encrypted and confidential when pooled with other members’ data; otherwise, no company or insurer would trust and utilize the solution.

“If you’re unable to look at any sensitive data at all—even name, or date of birth—it handcuffs your ability to see patterns and flag potential fraud. Improving the amount of data that you have secure access to is incredibly important: if you’re only analyzing your own data, you’re extremely limited in the insights you can get,” explained Eric Phillips, director of product operations at RiskStream Collaborative.

Existing solutions for data pooling and collaboration—including data masking and anonymization—proved to be time-consuming, inefficient, and even detrimental to the value of the data. RiskStream needed a platform that could ensure data would remain encrypted, protected, and unchanged throughout its entire lifecycle, empowering insurers to harness the benefits of collaborative analysis without modifying existing workflows. At the same time, RiskStream also needed that solution to integrate seamlessly into their systems to maximize efficiency.

“As a collaborative, we had the unique opportunity to help mitigate this existential threat, but we couldn’t do it on our own,” Phillips said. “We needed a solution that would help us securely share data without fears of leakages or breaches.”

Multiple collaborative members recommended Opaque, a confidential AI provider, as the right platform to enable secure multiparty data sharing and guarantee ease of use, ownership, and interoperability.

Secure Multiparty Data Sharing

Opaque enables secure multiparty data sharing via its Confidential AI platform.

With Opaque, collaborative members can now stream encrypted data directly from RAPID X into Opaque via API in near-real time without exposing it to any other party. Members can also run pre-approved, confidential analyses in Opaque to compare each claim against a claims database from all carriers who opt in (with all claims remaining encrypted during the analysis).

Carriers can also calculate a fraud score for each claim and notify others when the fraud score exceeds a threshold through RAPID X. Ultimately, insights are derived from the joint analyses, without ever exposing the raw data: carriers can only see insights regarding their own claims. This guarantees that sensitive information remains protected, addressing both regulatory and competitive concerns.

With Opaque, collaborative members have dramatically increased their speed of intervention and flagging of potential fraudulent activity. By detecting fraud more quickly and accurately, these carriers can reduce the financial losses associated with fraudulent claims—knowing that security, privacy, and compliance are baked into the solution.

“Our members didn’t even know that this was possible. It was eye-opening to work with Opaque and start educating our members on the platform and its capabilities,” according to Phillips. “Opaque is perfectly suited to help solve the problems that the insurance industry faces fighting fraud—while doing so in a safe, private, encrypted manner.”

“Opaque is perfectly suited to help solve the problems that the insurance industry faces fighting fraud—while doing so in a safe, private, encrypted manner.”

Ease of Use, Ownership, & Interoperability

Opaque proved to be a turnkey business application: the product was integrated quickly, connecting systems smoothly and enabling RiskStream to feed data directly into Opaque’s platform via existing technology. It took only two weeks to set up the platform, enabling RiskStream to avoid laborious and developer-heavy customization.

“Opaque’s solution was fairly off the shelf—it only took a little customization,” Phillips explained. “I was extremely impressed. We were on a bit of a time crunch, so to meet that deliverable in such a short amount of time absolutely exceeded our expectations.”

Once implemented, Opaque’s user-friendly platform empowered RiskStream to be the workspace manager, able to add or remove others into the workspace and set custom rules. This has ensured security, privacy, and total trustworthiness between members.

Collaborative members have been effusive in their praise for Opaque’s customer service, citing their efficiency in responding to technical questions. For RiskStream, Opaque is a strategic, valued partner, offering thought leadership and expertise on how to solve ongoing challenges.