Is insurance fraud getting displaced?

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Shyam_Bhatt
Shyam_Bhatt Posts: 19 QUANTEXA TEAM

As we talk to insurers globally, one trend that we are seeing more and more is that fraud is getting displaced to other lines of business away from the traditional lines of motor and property.

For example - during the COVID pandemic, in the UK when individuals / businesses had their claims refused for business interruption, there was a rise in fraudulent claims identified associated with the same parties for things like arson or even stolen expensive watches!

Recently there was a large scale pet fraud scam identified with a Vet making hundreds (that were caught) of records belonging to fictitious cats and dogs, to subsequently make claims for them.

With the whiplash reforms in the UK as well and having tariffs for traditional injury types like whiplash - it would be interesting to see where there will be rises in for suspicious claims.

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  • Alex_Johnson
    Alex_Johnson Posts: 46 QUANTEXA TEAM
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    A number of our clients have seen upwards of 25% increases in cross product fraud line fraud and the sad reality has been that we have seen that 50% of frauds in a business often go undetected due to the lack of a single view of data, customer, third-party and all connected parties and entities.

    Even what were considered opportunistic fraud MOs are starting to pop up in new lines of business and without a 98-99% accurately resolved view of your customer and claimants it is becoming easy for those that want to (or need to) to take advantage.

    What we have also seen is that customer personalisation through smarter ratings and improved customer product bundling and cross-selling techniques using advanced network and decision intelligence models has helped bring stop frauds which are one-off due to desperation / customer circumstance occurring - even more important with the current economic and inflationary situation.

  • Alan_Haskins
    Alan_Haskins Posts: 15 QUANTEXA TEAM
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    Increases in insurance fraud can be traced to local regional and even global events. Weather related activity like storms, hail, heavy rain, or snow fall, catastrophic events including hurricanes, tornadoes, and coastal flooding are most defiantly followed by increased insurance fraud and vehicle crime. COVID was not different in that the same criminals committing property, health care or other forms of financial crime saw an opportunity and went after government led recovery funds. Some estimates have COVID unemployment fraud at over $45 billion.

    We must mention the Coalition Against Insurance Fraud 2022 insurance fraud impact study that estimated a new cost of insurance fraud at $308.6 billion annually across all lines of business. This new estimate would conclude that traditional insurance fraud has steadily increased with the cost of inflation and measure of frequency and severity.   

  • Shyam_Bhatt
    Shyam_Bhatt Posts: 19 QUANTEXA TEAM
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    One interesting trend that is now getting picked up is Property Disrepair Claims which the traditional motor claims management companies in the UK are seen to be moving into. What is interesting about this is that there is slight crossover with insurance as landlords may have insurance of which some of the liability may be covered.

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