Marathons, Money Launderers, Fraudsters and Transaction Monitoring

Is insurance fraud slowly sinking your profits?

 

Connor previously worked for a leading Credit Reference Agency where he focused on the Insurance Sector. Most recently Connor managed a New Business and Account Management team.

His interest in fast moving innovative business, meant he spotted the need for better automation within the Insurance market. Leading him to make the move to TruNarrative in early 2019.

Connor now leads TruNarrative’s Insurance sector strategy. 

 

 

In my previous blog I looked at what we as an industry can learn from Fintech. In this blog I will explore the impact of insurance fraud in more detail. 

 

The first ever recorded attempt of fraud was insurance fraud, specifically on a bottomry arrangement (1).

Hegestratos used his ship filled with corn as security against a loan to finance his voyage. Long story short, his plan was to sink his ship, keep the loan and sell the corn until karma caught up with him and he drowned trying to escape.

It’s less likely we’ll fall victim to this type of fraud nowadays as fraudsters have progressed considerably and rely much more on tech to attack the insurance sector.

 

Insurance fraud affects us all, whether you’re in the industry or not. The increase in insurance fraud will drive up the price of everyone’s insurance premium and it’s the responsibility of those within the industry to ensure they are doing everything they can to identify all fraudulent activity.

The reality is, insurance fraud has progressed greatly since Hegestratos’ adventures in 300 BC and is found across every point in the customer journey across all lines. With account takeover, ghost broking, identity theft, flash for cash, crash for cash it’s clear to see why the insurance sector invests over £200 million each year to identify fraud yet an estimated £1.3 billion still gets through undetected.  

 

Would you identify an application for an insurance policy from a ghost broker?

Or identify that a motor claim was submitted on a device that has been directly linked to previous ‘crash for cash’ activity?

Can you be sure the identity you’re working with hasn’t been stolen?

Criteria for robust ID Verification

Insurance fraud isn’t committed solely by organised gangs or known criminals. With fronting, exaggerated injuries, changing your circumstances to lower your premium, it’s common for everyday people to commit fraud. This costs the insurance sector millions in fraudulent claims which in turn adds an additional £40 to every insurance policy per year.

Remember that next time you put yourself as the main driver for your child’s car. Not to mention the fact that it’s also a criminal offence.

 

Fraudsters are good at what they do. They’re constantly attempting to stay one step ahead of us. It’s vital that they’re not. Ghost Brokers noticed device reputation software such as Iovation was making it increasingly difficult to operate the way they were. As a way around this they started targeting call centres instead.

 

Concerningly, fraudulent claims increased by 27% from 2017 to 2018.

Fraudulent claims within household insurance shot up by a huge 52%.

Motor claims weren’t much better at an increase of 45%.

This is according to reports from Cifas.

 

We have discussed briefly the world of fraud within the Insurance Sector. The truth is, fraud is multi-sector and is constantly evolving. As a result of this, those operating within the industry and those offering solutions to combat fraud, must ensure they are always updating their products and processes.

Do you want to learn how we can help you make more accurate decisions by filtering on granular pieces of information, in natural language rather than techie IT speak?

Or how we can automate your process for preventing fraud whilst still offering a frictionless customer journey?

 

My Previous Blog – What can Insurance learn from Fintech?
My Next Blog – Coming soon 

 

Follow the below link to arrange a meeting with one of our Insurance Fraud specialists. 

 

 

(1) Johnstone, P. Crime, Law and Social Change (1998) 30: 107