Glossary
Insurance investigation glossary
Clear, concise definitions for the terms that matter in claims investigation, fraud detection, and SIU operations.
Investigation
5 termsSpecial Investigations Unit (SIU)
A Special Investigations Unit (SIU) is a dedicated department within an insurance company responsible for detecting, investigating, and resolving suspected fraudulent claims. SIU teams combine trained investigators, forensic analysts, and data tools to protect carriers from fraud losses.
Claims Triage
Claims triage is the process of screening incoming insurance claims to assess risk level, identify red flags, and prioritize which claims require investigation. It is the first step in the fraud detection pipeline - determining which of the thousands of daily claims warrant deeper review.
Document Forensics
Document forensics in insurance is the analysis of submitted documents - invoices, medical records, police reports, photos, and identification - to detect tampering, forgery, or fabrication. It examines both the visual content and hidden metadata of digital files to verify authenticity.
Examination Under Oath (EUO)
An Examination Under Oath (EUO) is a formal, sworn interview conducted by an insurance company during a claims investigation. The claimant is legally required to answer questions under oath, and their testimony is recorded by a court reporter. EUOs are a key tool for investigating suspected fraud.
OSINT in Insurance Investigation
OSINT (Open Source Intelligence) in insurance investigation refers to the collection and analysis of publicly available information - social media, public records, online activity, and digital footprints - to verify claims and identify fraud indicators. It is one of the fastest-growing evidence sources in modern claims investigation.
Fraud Types
5 termsStaged Accident
A staged accident is a deliberately caused or fabricated vehicle collision designed to generate fraudulent insurance claims. Participants intentionally create an accident scenario - or claim one occurred when it did not - to collect insurance payouts for vehicle damage, medical treatment, and lost wages.
Soft Fraud vs Hard Fraud
Soft fraud (opportunistic fraud) is the exaggeration or inflation of a legitimate insurance claim, while hard fraud is the deliberate fabrication of a loss or claim that never occurred. Both are illegal, but they differ in intent, scale, and detection difficulty.
Fraud Ring
A fraud ring is an organized group of individuals who collaborate to submit fraudulent insurance claims. Members typically include claimants, medical providers, attorneys, body shops, and sometimes insurance company insiders who work together across multiple claims to maximize payouts while evading detection.
Material Misrepresentation
Material misrepresentation in insurance is a false or misleading statement made by a policyholder that, if known, would have affected the insurer's decision to issue the policy or pay a claim. It is a legal basis for denying claims or voiding policies entirely.
Insurance Fraud Red Flags
Insurance fraud red flags are behavioral, documentary, and financial indicators that suggest a claim may be fraudulent. They are the signals that trigger investigation referrals - from timing anomalies and document inconsistencies to claimant behavior patterns and financial motives.
Industry
6 termsFirst Notice of Loss (FNOL)
First Notice of Loss (FNOL) is the initial report made by a policyholder to their insurance company when a loss or incident occurs. It is the starting point of the claims process - triggering claim creation, adjuster assignment, and the first evaluation of whether the claim warrants investigation.
Claims Leakage
Claims leakage is the difference between what an insurance company actually pays on a claim and what it should have paid with optimal handling. It includes overpayments due to fraud, inflated repairs, missed subrogation opportunities, and investigation gaps - typically representing 5-10% of total claims spend.
Subrogation
Subrogation is the legal right of an insurance company to pursue a third party that caused a loss to recover the amount paid on a claim. After paying a policyholder's claim, the insurer 'steps into the shoes' of the insured to seek reimbursement from the responsible party or their insurer.
Claims Adjuster
A claims adjuster is an insurance professional who evaluates insurance claims to determine the extent of the insurer's liability. They investigate losses, assess damages, verify coverage, negotiate settlements, and decide how much the insurance company should pay on a claim.
Loss Ratio
Loss ratio is the percentage of premiums collected that an insurance company pays out in claims. Calculated as (claims paid + adjustment expenses) / premiums earned, it is one of the most important profitability metrics in insurance. A loss ratio of 70% means the insurer pays $0.70 in claims for every $1.00 of premium collected.
Combined Ratio
The combined ratio is the sum of an insurance company's loss ratio and expense ratio, measuring total underwriting profitability. A combined ratio below 100% indicates the insurer is making an underwriting profit; above 100% means it is paying out more in claims and expenses than it collects in premiums.
Data & Systems
4 termsNational Insurance Crime Bureau (NICB)
The National Insurance Crime Bureau (NICB) is a U.S. non-profit organization that partners with insurers and law enforcement to detect, prevent, and prosecute insurance fraud and vehicle theft. It operates as the insurance industry's central intelligence hub for fraud data, analytics, and investigation support.
ISO ClaimSearch
ISO ClaimSearch is the insurance industry's largest shared claims database, containing over 1.5 billion claims records from more than 1,100 contributing companies. Insurers use it to detect suspicious claim patterns, identify prior claim history, and flag potential fraud by cross-referencing claims across the entire industry.
Network Analysis (Fraud Detection)
Network analysis in fraud detection is the technique of mapping and analyzing relationships between entities involved in insurance claims - claimants, providers, attorneys, witnesses, and addresses - to identify hidden connections that suggest coordinated fraud activity.
Suspicious Activity Report (SAR)
A Suspicious Activity Report (SAR) in insurance is a formal report filed by an insurance company with state fraud bureaus or regulatory bodies when it identifies activity that may indicate fraud, money laundering, or other criminal conduct related to insurance transactions.