During the International Association of Special Investigation Units (IASIU) conference held virtually on September 14 and 15, 2020, Polonious ran a panel discussion with some of the world’s leading investigation professionals. Investigation Insights contains new research into the performance, effectiveness and challenges of special investigation units, and communicates how better insights can drive improvements in productivity. You can download the full report here.
In this blog, we will look at the factors by which investigators measure the performance of their SIU and them impact they have.
To gather performance insights, we asked survey respondents to describe the factors by which they measure the performance of their SIU and found that they were largely as we would expect, though there were some concerns.
Referrals can mask real SIU performance
The overwhelming majority of respondents (80%) use number of referrals as a performance measure. When considered alongside the percentage of false positives, this is only a measure of how much work the SIU is doing clearing those cases — not a measure of how much value the SIU is providing.
For example, if you are an SIU with more than 40 per cent false referrals, as some of our respondents appear to be, then your true performance figure — the referrals that result in savings — is less than 60 per cent of your total referrals.
The next most commonly used metric is whether or not fraud is determined, which was used by 55 per cent of respondents. This is getting closer to reporting on actual value — cases where fraud was found and, we can assume, savings were made — but it is not quantifying those savings. This means you might be finding a lot of small fraud, which is good, but the ROI of your budget on those cases might not be there.
However, Figure 10 shows the range of individual measures employed, which we have itemised for illustrative purposes. Respondents could give multiple answers, and most, if not all, sensibly use a combination of measures.
There were also around 40 to 50 per cent of units using the percentage of claims investigated, and percentage referred to a department of investigations (DOI), and another 25 per cent reporting on recovered premiums and 40 per cent reported specifically measuring for ROI.
So, for example, measuring the total number of referrals combined with a percentage of investigations, and a percentage of referrals to DOI, would give a reasonable picture of SIU performance.
However, in terms of value provided to your organisation, the ROI — costs on investigations versus savings on claims — is an easily recognisable measure to claims executives.
Many respondents also report on indirect performance measures (see Figure 11) such as training and deterrent effects.
A bit more than half (53.33%) report on fraud deterrent effects, and 60 per cent report on training they provide for other staff on detecting and preventing fraud. Two thirds of respondents (66.67%) report on various other non-fraud related activities, but for this survey we did not go into further detail of what they were.
The contribution of these indirect activities to financial performance is harder to measure. However, it speaks to the proactive work that SIUs are doing to prevent fraud, which is very encouraging.