Many insurance companies aren’t taking full advantage of technology when it comes to fighting fraud, suggests a recently released report from Boston-based research and advisory firm Celent. “There really isn’t much excuse for an insurance company to not be using some of these technologies, depending on how big they are and what the extent of their exposure is,” says Donald Light, Celent senior analyst and author of the report, “Insurance Fraud Mitigation: Beyond Red Flags.”

Despite the fact that insurers have started to put more resources into fraud-mitigation technology, Light asserts, the traditional “red flag” method — in which adjusters use predetermined lists of about 30 circumstances to gauge if a claim may be fraudulent — is still over-used. “Red flags are one of the more traditional or legacy methods of identifying fraud,” he says. “The problem is they rely totally on experience and distilled best practices. They’re limited in terms of being able to scan the totality of the claims and discover complete sets of fraud methods.”