How to Investigate Insurance Fraud: The SIU Playbook

Insurance fraud investigation looks like a single discipline from the outside. From the inside, it's four or five overlapping disciplines: claim file review, field investigation, data analysis, interviews, and forensic accounting. The Special Investigations Unit (SIU) inside a carrier sits at the intersection of all of those. So do the outside firms that work alongside them.

This post walks through the playbook a professional insurance fraud investigation firm runs when a referral lands on the desk.

1. The Referral and First Read

An SIU referral usually arrives with a short narrative. It covers what the adjuster saw, what triggered concern, and what the claim is worth. The first pass is about triage. Is this a hard-fraud case, where the loss never happened or was intentionally caused? Or soft fraud, where the loss happened but the claimant has exaggerated it? Is it a single-claim file, or does it sit on top of a pattern? Our hard vs. soft insurance fraud explainer walks through that distinction.

2. Red Flag Review

A good investigator goes deep on the file before doing anything in the field. The point is to calibrate. Which red flags are present, which are strong, and which are explainable? Common signals include:

• A late-reported injury with no witnesses
• A Monday-morning claim after a disciplinary meeting
• A loss with no supporting documentation
• A provider or attorney who shows up on unrelated claims

See the full insurance fraud red flags and schemes guide for the common patterns.

3. Background, Prior Claims, and Link Analysis

An effective fraud investigator pulls claimant background before going into the field. That includes prior claims history (ISO ClaimSearch, CLUE), litigation history, criminal and civil records, business ownership, and address history. In organized ring cases, link analysis is often the decisive step. It connects claimants, providers, attorneys, vehicles, and addresses. We cover that workflow in NICB, ISO ClaimSearch, and how carriers share fraud intelligence.

4. Field Investigation

The field component depends on the line of business:

• Workers' comp: activity checks, sub rosa surveillance, social media investigation, neighborhood canvass.
• Auto: scene investigation, vehicle inspection, witness canvass, damage documentation.
• Property: scene investigation, loss inspection, cause-and-origin coordination.
• Health: medical canvass, provider investigation, patient interviews.

Licensed investigators and proper tradecraft matter here. Evidence gathered improperly loses its value the moment it hits cross-examination. That's especially true for surveillance video that can't establish chain of custody.

5. Statements and Interviews

Recorded statements are a core part of most fraud investigations. They come from the claimant, witnesses, employer, or providers. Done properly, they lock in the claimant's version of events. They also create material to cross-reference against documents and physical evidence. Our recorded statements guide covers the process.

6. The SIU Report

Good fraud investigation ends with a report your SIU can actually use. That means:

• A clear narrative of what happened
• A chronological timeline of the investigation
• Exhibits: photos, videos, statements, records
• A section on red flags and indicators
• A conclusion that supports the adjuster's next decision: denial, referral, EUO, continued investigation, or closure

When the case supports criminal referral, the report also becomes the basis for the package sent to the state Department of Insurance fraud division. Our case file guide walks through structure in more detail.

Why Playbook Discipline Matters

Carriers that run fraud investigations off ad-hoc instincts recover less and take longer to get there. Carriers that run them off a consistent playbook close cases faster and hold up better in court, even when the underlying facts are unusual. That is the entire reason SIUs exist. It is also the reason we structure our insurance fraud investigation services the same way.

If you have a suspicious claim and want a second set of eyes, contact Encyphir for a confidential consultation.