BOCA RATON, Fla., Dec. 7, 2004 -- The LexisNexis(R) RiskWise(R) Rate Evasion Evaluation service helps insurance providers prevent application and premium fraud using sophisticated models powered by public records data. Industry studies have shown that the estimated annual cost of insurance fraud is between $85 billion and $120 billion. In 2002, industry studies have shown that nearly $14 billion was lost to auto insurers through rate evasion. This number has been compared to equaling approximately 10% of personal auto insurance premium revenues industry-wide.

Many insurance companies have formal anti-fraud programs, but application and premium fraud (or "rate evasion") has proven difficult to stop or even identify. Rate evasion typically occurs when a potential customer or agent falsifies application information to obtain a lower premium. For example, to avoid paying higher insurance rates, an individual applying for car insurance may misrepresent garaging location, ownership or identity.

Existing solutions for preventing rate evasion have fallen short, according to Seth Perlmutter, Vice President of Insurance Services at LexisNexis: "Current processes are manual, inconsistent, subjective, time consuming, and are not usually effective at identifying applications with high risk of fraud or misrepresentation."

"As part of the new suite of Fraud Triage applications from LexisNexis, the Rate Evasion Evaluation solution allows providers to quickly and cost- effectively improve loss ratios through accurate application and policy assessment," said Perlmutter.

The service helps carriers and their agents address rate evasion, detect fraud or misrepresentation on applications, such as garage address, ownership and or registration, identity, property characteristics, or an unreported "youthful driver" in household as well as additional drivers in the household.

To combat fraud, LexisNexis Rate Evasion Evaluation will:

- Verify information using multiple databases in either an FCRA or non- FCRA environment.

- Validate and verify that the information provided is real - including personal identity, date of birth, address, phone number, vehicle registration, garage location, vehicle characteristics etc.

- Identify application misrepresentations during the underwriting process or anytime during the life of a claim.

- Return a unique customized score that identifies the areas of risk while providing supporting information.

- Provide results via batch or system-to-system processing.

Reducing fraud can help support initiatives to help lower premiums for honest policyholders. To cover the cost of insurance fraud, the National Insurance Crime Bureau estimates that all Americans pay $200 to $300 in increased insurance premiums each year. Yet, the Insurance Research Council reported in a joint 2002 study that only 25 percent of insurers thoroughly investigate cheating on insurance applications, and even fewer companies investigate insiders such as employees and agents who commit premium fraud.

About LexisNexis

In the United States, LexisNexis ( http://www.lexisnexis.com ) offers an extensive range of products and services that guide professionals and businesses in making confident decisions. For more than 30 years, LexisNexis has been a pioneer in secure data sharing, information policy, and personal privacy. Through its risk management flagship products, Accurint(R), RiskWise(R), PeopleWise(R), and Banko(R), LexisNexis helps to locate people and assets, authenticate identity, enable commerce, conduct background screening, and support national security initiatives. Customers include almost every Federal Government agency, the top 100 law firms, and Fortune 500 companies in the fields of national security, financial services, collection and recovery, insurance, telecommunications, e-commerce and retail.

SOURCE LexisNexis

Web Site: http://www.lexis-nexis.com